DEEPTECH INTERNATIONAL INC, 424B2, 1997-07-07

DEEPTECH INTERNATIONAL INC
424B2, 1997-07-07
CRUDE PETROLEUM & NATURAL GAS

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FILED PURSUANT TO
RULE 424(b)(2)
REGISTRATION NO. 333-24691

[DeepTech Logo]

9,506,363 SHARES OF COMMON STOCK

4,060,695 COMMON STOCK PURCHASE WARRANTS

DEEPTECH INTERNATIONAL INC.

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This Prospectus relates to 9,506,363 shares (the "Shares") of common stock,
par value $.01 per share ("Common Stock"), of DeepTech International Inc., a
Delaware corporation ("DeepTech") and warrants to purchase 4,060,695 shares of
Common Stock (the "Warrants," and collectively with the Shares, the
"Securities"). The Warrants were issued by DeepTech under various agreements
and arrangements and are immediately exercisable. The Warrants entitle the
holders to purchase shares of Common Stock at a specified exercise price
ranging from $4.00 to $10.00 per share until the expiration of the Warrants
pursuant to their respective terms ranging from July 15, 1998 to July 15, 2000.
See "Description of Warrants." There are 3,845,091 of the Shares currently
outstanding and 5,661,272 are issuable upon exercise of outstanding warrants
and options, including the Warrants. The Securities may be offered from time
to time (the "Offering") by persons (the "Selling Stockholders") who have
acquired such Securities in certain private placements, other transactions not
involving a public offering or who otherwise do not have an available exemption
from registration. The Securities are being registered under the Securities
Act of 1933, as amended (the "Securities Act"), on behalf of the Selling
Stockholders in order to permit the public sale or other public distribution of
the Securities.

The Securities may be sold or distributed from time to time by or for the
account of the Selling Stockholders, or by their pledgees on behalf of the
Selling Stockholders, in transactions (which may involve crosses and block
transactions) on the Nasdaq National Market ("Nasdaq") or any national
securities exchange or U.S. inter-dealer quotation system of a registered
national securities association on which the Securities are then listed, in the
over-the-counter market, in one or more privately negotiated transactions
(including sales pursuant to pledges), through the writing of options on the
Shares, in a combination of such methods of distribution, or by any other
legally available means. This Prospectus also may be used, with the Company's
consent, by donees of the Selling Stockholders, or by other persons acquiring
Securities who wish to offer and sell such Securities under circumstances
requiring or making desirable its use. Such methods of sale may be conducted
by the Selling Stockholders at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at prices otherwise
negotiated. The Selling Stockholders may effect such transactions directly, or
indirectly through broker-dealers or agents acting on their behalf and, in
connection with such sales, such broker-dealers or agents may receive
compensation in the form of commissions or discounts from the Selling
Stockholders and/or the purchasers of the Securities for whom they may act as
agent or to whom they sell Securities as principal or both (which commissions
or discounts might be in excess of customary commissions). To the extent
required, the names of the agents or broker-dealers, and applicable commissions
or discounts and any other required information with respect to any particular
offer of Securities by the Selling Stockholders, will be set forth in a
Prospectus Supplement. See "Plan of Distribution."

DeepTech will not receive any of the proceeds from the sale of the
Securities offered hereby although it may receive up to an aggregate of
$31,096,217 in connection with the exercise of outstanding warrants and
options, including the Warrants, to purchase Shares included as a part of the
Offering. DeepTech will bear all expenses incident to the registration of the
Securities under federal and state securities laws and the sale of the
Securities hereunder other than expenses incident to the delivery of the
Securities to be sold by the Selling Stockholders, including any transfer taxes
payable on any Securities, and any commissions and discounts payable to
underwriters, agents or dealers.

The Common Stock is quoted on Nasdaq under the symbol "DEEP." On June 24,
1997, the last reported sale price for the Common Stock as reported by Nasdaq
was $7.75 per share. DeepTech had 19,321,228 shares of Common Stock issued
and outstanding as of May 21, 1997. At May 21, 1997, DeepTech had outstanding
warrants and options to acquire 8,920,367 shares of Common Stock. The Warrants
are not listed on an exchange or quoted on Nasdaq, and it is not anticipated
that application will be made to list the Warrants.

PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
THE CAPTION "RISK FACTORS" LOCATED ON PAGE 3 OF THIS PROSPECTUS.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

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The date of this Prospectus is June 26, 1997.

AVAILABLE INFORMATION

DeepTech is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act"), and, in accordance therewith, files reports,
proxy and information statements and other information with the Securities and
Exchange Commission (the "SEC"). The reports, proxy and information statements
and other information concerning DeepTech can be inspected and copied at the
public reference facilities maintained by the SEC at Judiciary Plaza, Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's
regional offices located at Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661 and at Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can also be obtained from the SEC at prescribed
rates through the Public Reference Section of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549. Such documents also may be obtained through the
website maintained by the SEC at http://www.sec.gov. Such reports, proxy
statements and other information may also be inspected at the offices of Nasdaq
at 1735 K Street, N.W., Washington, D.C. 20006.

DeepTech has filed with the SEC a Registration Statement on Form S-3 under
the Securities Act with respect to the Securities (such registration statement,
including all amendments and supplements thereto, is hereinafter referred to as
the "Registration Statement"). This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain parts of which have been omitted in
accordance with the rules and regulations of the SEC. Statements contained in
this Prospectus as to the contents of any contract, agreement or other document
are not necessarily complete and in each instance reference is made to the copy
of such contract, agreement or other document filed as an exhibit to the
Registration Statement or incorporated herein by reference, and each such
statement is deemed qualified in its entirety by such reference. The
Registration Statement and exhibits thereto may be inspected without charge at
the public reference facilities maintained by the SEC, regional offices of the
SEC and offices of the SEC and Nasdaq referred to above, and copies thereof may
be obtained from the SEC at prescribed rates.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, filed by DeepTech with the SEC pursuant to the
Exchange Act, are incorporated herein by reference and made a part of this
Prospectus:

(i) DeepTech's Annual Report on Form 10-K for the fiscal year
ended June 30, 1996;

(ii) DeepTech's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996;

(iii) DeepTech's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1996; and

(iv) DeepTech's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.

All reports and other documents filed by DeepTech with the SEC pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the Offering shall be deemed
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus
or in a document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in
any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.

DeepTech undertakes to provide without charge to each person to whom a copy
of this Prospectus has been delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated by reference herein,
other than the exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates. Written or oral requests for such copies should be
directed to DeepTech International Inc., Texas Commerce Tower, Suite 7500, 600
Travis, Houston, Texas 77002, Attention: Corporate Secretary, telephone number
(713) 224-7400.

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RISK FACTORS

IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS,
PROSPECTIVE PURCHASERS OF THE SECURITIES SHOULD CONSIDER CAREFULLY THE
FOLLOWING RISK FACTORS IN EVALUATING AN INVESTMENT IN DEEPTECH.

Unless the context otherwise requires, references in this Prospectus to
"DeepTech" shall mean DeepTech International Inc., a Delaware corporation, and
references to the "Company" or its operations shall mean DeepTech and its
operating subsidiaries (the "Subsidiaries"), Leviathan Gas Pipeline Company
(indirectly 85%-owned) ("Leviathan"), Tatham Offshore, Inc. (37%-owned) ("Tatham
Offshore"), RIGCO North America, L.L.C. (indirectly 100%-owned), Deepwater
Production Systems, Inc. (100%-owned) ("Deepwater Systems"), Deepflex Production
Services, Inc. (100%-owned) ("Deepflex"), Offshore Gas Marketing, Inc.
(80%-owned) ("Offshore Marketing") and Offshore Gas Processors, Inc. (85%-owned)
("Offshore Processors"), and their respective operations. Leviathan is the
general partner of Leviathan Gas Pipeline Partners, L.P., a publicly-traded
master limited partnership. References to the "Partnership" contained herein
shall mean Leviathan Gas Pipeline Partners, L.P. and its subsidiaries.

Certain of the following risk factors relate particularly to Leviathan, the
Partnership and Tatham Offshore. The risk factors relating to the Partnership
and Leviathan may adversely affect the value of DeepTech's interest in
Leviathan and the ability of the Partnership to pay management fees to DeepTech
or to make distributions to Leviathan. The risk factors relating to Tatham
Offshore may adversely affect the value of DeepTech's interest in Tatham
Offshore and the ability of Tatham Offshore to pay management fees to DeepTech
or make advances or distribute earnings or meet its obligations under the
Tatham Offshore Subordinated Notes and any other intercompany indebtedness
owing to DeepTech. The inability of Leviathan and/or Tatham Offshore to make
such payments to DeepTech would have a material adverse effect upon DeepTech's
ability to pay its operating expenses and service its debt obligations.

SUBSTANTIAL LEVERAGE OF THE COMPANY

DeepTech is highly leveraged. At March 31, 1997, the Company had
stockholders' equity of $23.2 million and total consolidated long-term
indebtedness of approximately $155.5 million, of which $65 million was
attributable to RIGCO. In April 1997, the RIGCO credit facility was amended and
an additional $12.0 million was borrowed to fund additional upgrades to one of
the Company's semisubmersible rigs. DeepTech incurred substantial indebtedness
as a result of the issuance of $82 million aggregate principal amount of 12%
Senior Secured Notes due in the year 2000 (the "Senior Notes") in March 1994
(the "Debt Offering"). The indenture relating to the Senior Notes (the "Senior
Note Indenture") contains covenants that, among other things, require DeepTech
to meet certain collateral coverage tests and restrict the ability of DeepTech
to incur additional indebtedness, create or incur liens, make capital
expenditures, effect certain assets sales and engage in certain mergers or
similar transactions. Further, substantially all material assets of DeepTech
have been pledged to secure the Senior Notes. Any inability of DeepTech to
service its obligations in respect of the Senior Notes or other indebtedness
could have a significant adverse affect on the market value and marketability
of the Securities.

DeepTech expects that the Company will remain highly leveraged for the
foreseeable future, with important consequences to stockholders of DeepTech,
including the following: (i) the ability of the Company to obtain additional
financing for working capital, acquisitions, advances or contributions to the
subsidiaries for capital expenditures or other corporate purposes, should it
need to do so, may be impaired; (ii) all or a substantial portion of the
Company's cash flow from operations will be required to be dedicated to the
payment of the Company's interest expense and principal payment obligations;
(iii) the Company is more highly leveraged than many of its competitors, which
may place it at a competitive disadvantage; and (iv) the Company's degree of
leverage may make it more vulnerable to a downturn in its business or the
economy generally. If the Company is unable to generate sufficient cash flow
from operations and obtain additional sources of financing, the Company may be
required to refinance all or a portion of its debt, sell certain of its assets
or both. There can be no assurance that any such refinancing or asset sales
would suffice to meet interest and principal payments as they become due. The
failure to make such payments as they come due would have a material adverse
effect on DeepTech.

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DEEPTECH'S HOLDING COMPANY STRUCTURE; DEPENDENCE ON THE SUBSIDIARIES

DeepTech is a holding company whose material assets consist primarily
of the stock of the Subsidiaries. As a result, DeepTech is dependent upon
management fees paid to it pursuant to management agreements with each of the
Subsidiaries, quarterly dividends funded by distributions from the Partnership
and interest on and the repayment of debt by the Subsidiaries to pay its
operating expenses, service its debt obligations, including the Senior Notes,
and satisfy any mandatory repurchase obligations relating to the Senior Notes.
Loan agreements to which certain Subsidiaries are, or may in the future become,
parties may restrict the ability of such Subsidiaries to make payments to
DeepTech. The Company anticipates that additional Subsidiaries may enter into
credit arrangements that may prohibit or otherwise restrict their ability to
pay dividends and make advances to DeepTech. In addition, distributions in
respect of the Partnership's Common Units, which are owned indirectly by
DeepTech, may only be made after all minimum distributions payable in respect
of the Partnership's Preference Units have been paid in full. The failure of
(i) a Subsidiary to pay management fees or repay principal or interest on its
intercompany debt or (ii) the Partnership to make distributions could have a
material adverse effect on DeepTech's financial condition and results of
operations.

RELIANCE ON KEY PERSONNEL; CONCENTRATION OF OWNERSHIP

The Company is dependent upon the services of its executive officers
and key employees, including Thomas P. Tatham, Chairman of the Board and Chief
Executive Officer of DeepTech. The Company does not have an employment
agreement with Mr. Tatham or its other key employees. The Company also does not
maintain Key-man insurance for any of its key employees. The loss of the
services of the Company's executive officers and key employee, in general, and
of Mr. Tatham, in particular, could have a material adverse effect on the
Company.

Taking into account the effect of exercising options, Mr. Tatham
currently beneficially owns 45.3% of the Common Stock of DeepTech and the other
executive officers and directors of DeepTech beneficially own approximately an
additional 14.8% of the Common Stock. Accordingly, Mr. Tatham and such other
executive officers and directors, if they voted together, would have the
ability to elect all of DeepTech's directors and control the outcome of all
matters submitted to a vote of DeepTech's stockholders. In addition, so long
as Mr. Tatham owns more than one-third of DeepTech's outstanding Common Stock,
Mr. Tatham acting alone would be able to prevent certain actions that require
the affirmative vote of at least two-thirds of DeepTech's outstanding Common
Stock.

REPURCHASE OF SENIOR NOTES UPON A CHANGE OF CONTROL, INCREASED LEVERAGE BY
THE PARTNERSHIP, TATHAM CONVERSION EVENT OR A DECLINE IN THE VALUE OF
COLLATERAL

The Senior Note Indenture provides that upon the occurrence of a
Change of Control, Partnership Leverage Event or Tatham Conversion Event (each
as defined in the Senior Note Indenture), DeepTech shall be required to offer
to holders of the Senior Notes to repurchase any and all of the Senior Notes at
a purchase price equal to 101%, 100% and 101%, respectively, of the aggregate
principal amount, plus accrued and unpaid interest, if any, to the date of
purchase. In addition, the Senior Note Indenture provides that if DeepTech's
Asset Coverage Ratio (as defined in the Senior Note Indenture) falls below
specified levels, DeepTech is required to offer to repurchase, at a purchase
price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, an amount of Senior Notes sufficient to increase the Asset
Coverage Ratio to not less than specified levels. There can be no assurance
that DeepTech will have sufficient resources to purchase the Senior Notes if it
is required to do so under the terms of the Senior Note Indenture. This
provision may also adversely affect the ability of DeepTech to obtain
additional financing in the future. No assurance can be given that the terms
of any future indebtedness will not contain cross default provisions based on a
Change of Control or other defaults under the Senior Note Indenture.

POSSIBLE DEPRESSING EFFECT OF FUTURE SALES OF DEEPTECH COMMON STOCK

No predictions can be made as to the effect, if any, that future sales
of the Shares, the availability of Common Stock for sale or the perception that
such sales could occur, will have on the market price of the Common Stock. In
addition, DeepTech has issued and may issue in the future Common Stock and/or
options or warrants to purchase Common Stock pursuant to exemptions from
registration available under the Securities Act

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in connection with its business activities. Such securities are subject to
restrictions on resale in accordance with the Securities Act and the
regulations promulgated thereunder. However, if such shares are registered for
sale to the public or sales are permitted pursuant to Rule 144 or another
available exemption from registration under the Securities Act, such securities
may be sold into the public market. The issuance and subsequent resale of a
substantial number of shares of Common Stock, or a perception that such sales
could occur, could have a material adverse effect on the market price of the
Common Stock.

PERFORMANCE OF THE PARTNERSHIP DEPENDS ON THROUGHPUT LEVELS

The future performance of the Partnership will depend, in part, on the
throughput levels achieved by the Partnership's natural gas pipelines (the "Gas
Pipelines"), and the Poseidon Oil Pipeline (collectively with the Gas
Pipelines, the "Pipelines") and any future pipelines constructed by the
Partnership. Throughput levels on each Pipeline will be affected by a number
of factors, including the production rates and reserve lives of wells connected
to each Pipeline. The proved reserves that are available for transportation on
the Pipelines are depleting assets and, as such, will be produced over a finite
period. Each of the Pipelines must access additional reserves to offset the
natural decline of production from existing wells connected to the Pipelines.
The long term prospects of the Partnership are, therefore, dependent upon the
development of additional reserves in areas accessible to the Pipelines and the
interconnection and transportation by the Pipelines of production from, such
additional reserves. The reserve prospects in the Flextrend (water depths of
600 to 1,500 feet) and Deepwater (water depths over 1,500 feet) areas of the
Gulf of Mexico will require significant capital expenditures by others for
exploration and development drilling and the installation of production
facilities and pipeline extensions to interconnect with a Pipeline.
Development of additional reserves in these areas could be adversely affected
by relatively low prices for oil and gas, capital budget limitations or the
lack of available capital. Accordingly, no assurance can be given that such
reserves exist or, if they do exist, as to the timing of their discovery or
development or their availability to or interconnection with the Pipelines.
Furthermore, even if such additional reserves exist and are ultimately
produced, no assurance can be given that all the production therefrom will be
interconnected with or transported by the Pipelines since the Partnership will
compete for such transportation with other pipelines on the basis of numerous
factors, including geographic proximity to such production, cost of connection,
available capacity, transportation rates and access to onshore markets.

REGULATION BY THE FERC OF THE REGULATED PIPELINES AND CHANGING REGULATORY
ENVIRONMENT

Certain of the pipelines operated by the Partnership (the "Regulated
Pipelines") are classified as a "natural gas company" by the Natural Gas Act of
1938, as amended. Consequently the Federal Energy Regulatory Commission (the
"FERC") has jurisdiction over the Regulated Pipelines with respect to
transportation of gas, rates and charges, construction of new facilities,
extension or abandonment of services and facilities, accounts and records,
depreciation and amortization policies and certain other matters. In addition,
the Regulated Pipelines, where required, hold certificates of public
convenience and necessity issued by the FERC covering their facilities,
activities and services. The Regulated Pipelines may not charge or collect
more than the maximum rates on file with the FERC. In the event of an adverse
outcome with respect to any rate case of a Regulated Pipeline, the
Partnership's cash flow could be materially adversely affected. Given the
extent of regulation of the Regulated Pipelines by the FERC, the extensive
changes in FERC policy in recent years, the evolving nature of regulation and
the possibility for additional changes, no assurance can be given regarding the
likely regulations and restrictions under which the Pipelines will be operating
in the future or the effect such regulations and restrictions will have on the
Pipeline's financial position, results of operations and cash flows. Further,
although only the Regulated Pipelines are currently subject to rate regulation
by the FERC, all of the Pipelines are subject to regulation by various federal
authorities. There can be no assurance that laws and regulations currently
enacted or to be enacted in the future will not adversely affect the Pipelines.

HIGH DEPENDENCE ON DEVELOPMENTAL AND EXPLORATORY DRILLING ACTIVITIES

The success of Tatham Offshore is largely dependent upon the success
of its developmental and exploratory drilling activities. The Partnership is
also engaged in developmental drilling activities. Drilling

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involves numerous risks, including the risk that no commercially productive gas
or oil reservoirs will be encountered. The cost of drilling, completing and
operating wells is often uncertain, and drilling operations may be curtailed,
delayed or canceled as a result of a variety of factors, including unexpected
drilling conditions, pressure or irregularities in formations, equipment
failures or accidents, weather conditions and shortages or delays in the
delivery of the requisite equipment. In addition, to the extent Tatham
Offshore or the Partnership acquire additional properties, 3-D seismic and
other advanced technology may require greater pre-drilling expenditures than
traditional drilling strategies. There can be no assurance as to the success
of Tatham Offshore or Partnership drilling activities.

SUBSTANTIAL FUTURE CAPITAL REQUIREMENTS OF TATHAM OFFSHORE

To implement the development of its oil and gas properties, Tatham
Offshore intends to seek additional capital through a combination of other
funding sources that may include traditional reserve base borrowings, joint
venture partnerships, vendor financings, production pay financings and
offerings of debt and equity securities. Cash flows from operations, to the
extent available, will also be used to fund some expenditures. Tatham
Offshore's ability to access additional capital will depend on the success of
prior exploratory and development drilling and the status of various capital
markets at the time such capital is sought. Accordingly, there can be no
assurance that sufficient capital will be available to Tatham Offshore from any
source or that, if available, it will be on terms acceptable to Tatham
Offshore. Should sufficient financing not be available because costs are
higher than estimated or otherwise, the development and exploration of Tatham
Offshore's properties would be delayed and, accordingly, the implementation of
Tatham Offshore's business strategy would be adversely affected.

VOLATILITY OF OIL AND GAS PRICES

Tatham Offshore and the Partnership's future financial condition and
results of operations are particularly dependent upon the prices received for
their oil and gas production and the costs of acquiring, developing and
producing reserves. Oil and gas prices have historically been volatile and are
likely to continue to be volatile in the future. Prices for oil and gas are
subject to fluctuations in response to relatively minor changes in supply,
market uncertainty and a variety of additional factors which are beyond the
control of Tatham Offshore and the Partnership. These factors include
political stability in the Middle East and elsewhere, the foreign supply of oil
and gas, the price of foreign imports, the level of consumer product demand,
government regulations and taxes, the price and availability of alternative
fuels and the overall economic environment. A decrease in oil and gas prices
could adversely affect the financial condition and results of operations of
Tatham Offshore and the Partnership.

OPERATING RISKS; DEEPER WATER RISKS

The oil and gas operations of the Company, particularly the
Partnership and Tatham Offshore, are subject to all of the risks and hazards
typically associated with the exploration for, and/or the development and
production of, oil and gas in the Gulf and any other areas in which the
Partnership or Tatham Offshore may, in the future, conduct such activities.
Risks in drilling operations include blowouts, oil spills, fires and offshore
risks such as capsizing, collision, hurricanes and other adverse weather and
sea conditions. Such risks can result in personal injury and loss of life and
substantial damage to or destruction of oil and gas wells, platforms,
production facilities or other property, suspension of operations and
liabilities to third parties, any and all of which could adversely affect the
Partnership or Tatham Offshore.

Most of the Company's oil and gas properties are located in water
depths of greater than 600 feet. Drilling operations in such water depths are
by their nature more difficult than drilling operations conducted in shallower
water depths because they require the application of more advanced drilling
technologies, possibly resulting in significantly higher drilling costs. It is
anticipated that some of the Company's wells will be completed utilizing subsea
completion techniques which involve the installation of subsea wellheads and
equipment with tie-back lines to adjacent production facilities. The
installation of these facilities requires the use of advanced technologies,
including the use of remote installation mechanics. Such operations involve a
higher risk of

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encountering mechanical difficulties and equipment failures which, if
encountered, could result in significant cost overruns.

The Company's operations also could result in liability for oil
spills, discharge of hazardous materials and other environmental damages. In
accordance with customary industry practices, the Company maintains insurance
against some, but not all, of such risks and some, but not all, of such losses.
There can be no assurance, however, that such insurance will continue to be
available to or carried by the Company or, if available and carried, will be
adequate to cover the Company's liability in all circumstances. The occurrence
of an event not fully covered by insurance could have a material adverse effect
on the financial position and results of operations of the Company. In
addition, the Company may be liable for environmental damages caused by
previous owners of property purchased by the Company, which liabilities would
not be covered by insurance.

RISKS OF OFFSHORE CONTRACT DRILLING SERVICES

The Company's experience in the contract drilling business is limited.
RIGCO currently has two semisubmersible drilling rigs, the FPS Laffit Pincay and
the FPS Bill Shoemaker. The FPS Laffit Pincay has only been performing
contract drilling services in the Gulf of Mexico since February 1996. The FPS
Bill Shoemaker is currently undergoing an extensive upgrade, repair and
refurbishment program to enable it to perform contract drilling services. The
ability of RIGCO to fund its future debt service obligations under the RIGCO
credit facility is dependent upon the successful refurbishment of the FPS Bill
Shoemaker and the leasing of both the FPS Laffit Pincay and the FPS Bill
Shoemaker at appropriate rates.

The Company's contract drilling business is substantially dependent
upon the condition of the oil and gas industry, the level of exploration and
production expenditures as well as the supply of drilling rigs capable of
competing with the Company's semisubmersible drilling rigs. The demand for
contract drilling services is directly influenced by oil and gas prices,
expectations about future oil and gas prices, the cost of exploration and
production activities, the sale and expiration dates of leases and government
regulations. Historically in periods of depressed natural gas prices, the
demand for drilling and related services has declined leading to low day rates
and low utilization of available equipment. In addition, even in an environment
of stronger natural gas prices and increased drilling activity, movement of
existing rigs, refurbishment of older rigs or new construction could increase
the supply of rigs available and therefore adversely affect day rates and
utilization levels. The Company cannot predict the timing or extent of the
future level of demand of the Company's drilling services or whether recent
increases in day rates and utilization rates will be sustained.

The Company anticipates that the capital requirements necessary to
complete the upgrades on the FPS Bill Shoemaker will be funded with proceeds
from the RIGCO credit facility or from cash on hand, that the refurbishment
program will be completed as currently scheduled and that the FPS Bill
Shoemaker will successfully begin performing contract drilling services.
However, there can be no assurance that the refurbishment of the FPS Bill
Shoemaker will be completed as scheduled or that the costs to complete the
refurbishment will not exceed the funds available for that purpose, or that the
FPS Bill Shoemaker will be successfully leased for contract drilling service.
Should sufficient financing not be available because costs are higher than
estimated or otherwise, the refurbishment of the FPS Bill Shoemaker would be
delayed and the ability of RIGCO to service its debt requirements under the
RIGCO credit facility would be adversely affected.

REGULATIONS

The production and development operations of the Partnership and the
exploration, development and production operations of the Company are subject
to regulation at the federal and state levels. Such regulation includes
requiring permits for the drilling of wells and maintaining bonding and
insurance requirements in order to drill or operate wells, and regulating the
location of wells, the method of drilling and casing wells, the surface use and
restoration of properties upon which wells are drilled and the plugging and
abandoning of wells. Exploration, production and development operations are
also subject to various conservation laws and regulations. These include the
regulation of the size of drilling and spacing units or proration units, the
density of wells that may be drilled, the levels of production and the
unitization or pooling of gas and oil properties. No assurance can be given
regarding the likely regulations and restrictions under which the Company's
development and production activities may be conducted in the future or the
effect such regulations and restrictions will have on the Company's financial
position, results of operations and cash flows.

The operations of certain of the Subsidiaries, particularly those of
Tatham Offshore and the Partnership, are subject to extensive federal, state
and local regulatory requirements relating to environmental affairs, health and
safety, waste management and chemical products. Governmental authorities have
the power to enforce compliance with these regulations and permits and
violators are subject to civil and criminal penalties, including civil fines,
injunctions or both. Third parties may also have the right to pursue legal
actions to enforce compliance. Future developments such as stricter laws,
regulations or enforcement policies thereunder could significantly increase the
cost of compliance with environmental laws and regulations. Moreover, as with
other companies engaged in similar or related businesses, some risks,
environmental costs and liabilities are inherent in the operations of certain
of the Subsidiaries due to their handling of hydrocarbon products, and there
can be no assurance that material environmental costs and liabilities will not
be incurred by such Subsidiaries. The Company believes it is currently in
compliance with all applicable regulations.

UNCERTAINTY OF ESTIMATES OF RESERVES AND FUTURE NET RESERVES

There are numerous uncertainties inherent in estimating oil and
natural gas reserves and their estimated values, including many factors beyond
the control of the producer. The reserve data incorporated by reference into
this Prospectus represent only estimates, which have been prepared by
independent petroleum engineers. Reservoir engineering is a subjective process
of estimating underground accumulations of oil and natural gas that cannot be
measured in an exact manner. Estimates of economically recoverable oil and gas
reserves and of future net cash flows necessarily depend upon a number of
variable factors and assumptions, such as historical production from the area
compared with production from other producing areas, the assumed effects of
regulations by government agencies and assumptions concerning future oil and
gas prices, future operating costs, geologic success, severance and excise
taxes, development costs and workover and remedial costs, all of which may in
fact vary considerably from actual results. For these reasons, estimates of
the economically recoverable quantities of oil and natural gas attributable to
any particular group of properties, classifications of such reserves based on
risk of recovery and estimates of the future net cash flows expected therefrom
prepared by different engineers or by the same engineers at different times may
vary substantially and such reserve estimates may be subject to downward or
upward adjustment based upon such factors, particularly with respect to new
discoveries

7
<PAGE> 9
and to estimates of proved undeveloped reserves, which comprise a substantial
portion of the Company's reserves. Actual production, revenues and expenditures
with respect to the Company's reserves will likely vary from estimates, and
such variances may be material.

The present values of estimated future net cash flows incorporated by
reference into this Prospectus should not be construed as the current market
value of the estimated oil and natural gas reserves attributable to the
Company's properties. In accordance with applicable requirements of the SEC,
the estimated discounted future net cash flows from proved reserves are
generally based on prices and costs as of the date of the estimate, whereas
actual future prices and costs may be materially higher or lower. Actual
future net cash flows also will be affected by factors such as the amount and
timing of actual production, supply and demand for oil and natural gas,
curtailments or increases in consumption by gas purchasers and changes in
governmental regulations or taxation. The timing of actual future net cash
flows from proved reserves, and their actual present value, will be affected by
the timing of both the production and the incurrence of expenses in connection
with the development and production of oil and gas properties. In addition,
the calculation of present value of the future net revenues using a 10%
discount as required by the SEC, is not necessarily the most appropriate
discount factor based on interest rates in effect from time to time and risks
associated with the Company's reserves or the oil and gas industry in general.

LEGAL PROCEEDINGS

The Company is and may in the future become a party to various legal and
environmental proceedings which have arisen or may arise in the ordinary course
of its business. No assurance can be given with respect to the outcome of
these legal proceedings and the effect such outcomes may have on the Company.

CONFLICTS OF INTEREST

DeepTech is a diversified energy company engaged, through its
operating subsidiaries, in offshore contract drilling services and the
acquisition, development, production, processing, transportation and marketing
of, and the exploration for, oil and gas. DeepTech is currently a party to
certain material contracts with the Subsidiaries and/or their affiliates and
such entities have also entered into material contracts among themselves.
DeepTech anticipates that DeepTech, the Subsidiaries and the respective
affiliates of DeepTech and the Subsidiaries will enter into additional material
contracts and agreements. In addition, certain officers and directors of
DeepTech are also officers and/or directors of the Subsidiaries and their
affiliates and such officers and directors have entered into material contracts
and agreements with such entities. Although the Senior Note Indenture
permits DeepTech to enter into transactions with its affiliates only if each
such transaction, or series of related transactions, on whole, is on terms no
less favorable to DeepTech than those that could be obtained in a comparable
arm's-length transaction with a non- affiliate, such transactions involving
amounts of less than $2.5 million only require the authorization of officers of
DeepTech even if such officers have an interest in such transactions. In
addition, DeepTech manages each of the Subsidiaries pursuant to management
agreements. DeepTech is not prohibited under the management agreements from
engaging, directly or indirectly, in other business activities in which the
respective Subsidiaries will have no economic interest. Certain conflicts may
arise as a result of existing and future transactions between DeepTech and its
affiliates. These conflicts may be resolved in favor of such affiliates and
such resolution may have a material adverse effect on DeepTech.

COMPETITION

The energy industry is highly competitive. The Company competes in
the areas of property acquisitions and the development, production, gathering,
transportation, and marketing of, and exploration for oil and gas with major
interstate pipeline companies, major oil companies, other independent oil and
gas concerns and individual producers and operators. Many of these competitors
have substantially greater financial and other resources than the Company. For
a number of years, depressed oil and gas prices and an oversupply of drilling
rigs have adversely affected the offshore drilling market. In addition, RIGCO
has significant competition from many other offshore drilling contractors in
all of the areas in which it operates. Activity levels in areas in which RIGCO

8
<PAGE> 10
operates, including the U.S. Gulf of Mexico, increased in 1995 and 1996 due, in
part, to increased oil and natural gas prices and increased levels of
exploration and production activities. RIGCO has experienced
a corresponding increase in day rates. RIGCO cannot predict the extent to
which current market conditions will continue.

THE COMPANY

The Company believes that its holding company structure facilitates
operations by enabling each Subsidiary to focus its attention on a specific
aspect of the oil and gas industry while isolating it from the regulatory
obligations and potential liabilities of the other Subsidiaries. In addition,
such structure enables the Company to attract and retain key personnel by
issuing to such personnel direct minority equity interests in the Subsidiary
for which they work.

The principal executive office of DeepTech is located at Texas Commerce
Tower, Suite 7500, 600 Travis, Houston, Texas 77002, and its telephone number
is (713) 224-7400.

USE OF PROCEEDS

DeepTech will not receive any of the proceeds from the sale of the
Securities offered hereby, although it may receive up to an aggregate of
$31,096,217 in connection with the exercise of outstanding warrants and options,
including the Warrants, to purchase Shares included as a part of the
Offering. DeepTech will bear all expenses incident to the registration of the
Securities under federal and state securities laws and the sale of the
Securities hereunder other than expenses incident to the delivery of the
Securities to be sold by Selling Stockholders, including any transfer taxes
payable on any Securities, and any commissions and discounts payable to
underwriters, agents or dealers. See "Plan of Distribution."

DESCRIPTION OF WARRANTS

DeepTech has issued warrants to purchase Common Stock to noteholders,
employees, directors and financial institutions under various agreements and
arrangements. In December 1996, DeepTech extended an offer to certain of its
warrantholders whereby the exercise period for certain vested warrants could be
extended for one, two, or three years in consideration for the immediate
exercise of 25%, 37.5% or 50%, respectively, of the warrants so designated by
each warrantholder. As a result of this offer, on December 31, 1996, DeepTech
issued 1,080,701 shares of Common Stock pursuant to the exercise of warrants at
prices ranging from $4.00 to $4.50 per share of Common Stock and extended the
exercise period on 1,894,446 warrants. In January 1997, in conjunction with
certain refinancings, DeepTech agreed to provide Mr. Thomas P. Tatham, Chairman
and Chief Executive Officer of DeepTech, and members of his immediate family
the right to accept the offer to exercise 25%, 37.5% or 50% of their warrants
in exchange for an extension of one, two or three years, respectively, in the
expiration date of the remaining warrants, until June 1, 1997. On May 21, 1997,
Mr. Tatham exercised 722,917 warrants and DeepTech issued 722,917 shares of
Common Stock to Mr. Tatham and extended the exercise period on 2,168,749
warrants. The Warrants registered pursuant to the Registration Statement are
4,060,695 of the 4,063,195 warrants for which the exercise period was extended
pursuant to the arrangements discussed above.

The Warrants are each issued pursuant to agreements between DeepTech and
the Warrantholders. The following summary of the terms of the Warrants is not
intended to be complete. The terms of the respective warrant agreements, the
forms of which have been filed as exhibits to the Registration Statement, are
incorporated by reference herein, and this description is qualified in its
entirety by reference thereto. Certain Warrantholders acquired their Warrants
from the original warrantholders or their transferees in transactions exempt
from registration under the Securities Act. Each Warrant entitles the holder
thereof to purchase the stated number of shares of Common Stock, subject to
adjustment in certain circumstances. The Warrants are exercisable at any time
prior to their stated expiration. DeepTech has authorized and reserved for
issuance that number of shares of Common Stock sufficient to provide for the
exercise of the Warrants. When delivered, each share of Common Stock will be
fully paid and non-assessable. No fractional shares will be issued upon
exercise of the Warrants, but the Company will pay the cash value of any
fractional shares otherwise issuable. Warrants may be exercised by notice to
DeepTech accompanied by payment of the aggregate exercise price for the shares
of Common Stock being acquired.

9
<PAGE> 11
The exercise price and the number of shares of Common Stock purchasable
upon the exercise of the Warrants are subject to adjustment in certain events,
including (i) the issuance of a stock dividend to holders of shares of Common
Stock, (ii) decrease in the number of shares of Common Stock by combination of
the outstanding shares of Common Stock, (iii) the distribution by DeepTech of
stock, other securities or assets with respect to or in exchange for Common
Stock in connection with certain capital reorganizations, reclassifications,
consolidations or mergers, (iv) the issuance of rights, options or warrants to
holders of shares of Common Stock entitling such holders to purchase shares of
Common Stock for a consideration per share less than the then current Warrant
exercise price, (v) any distribution by DeepTech of shares of capital stock
other than Common Stock, evidences of indebtedness or assets (excluding cash
dividends paid from retained earnings) or rights or warrants to subscribe for
or purchase any of its securities, and (vi) any sale or issuance by DeepTech of
shares of Common Stock, or rights, options or warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase
shares of such Common Stock, at a price per share of Common Stock less than the
then current Warrant exercise price.

No adjustment will be made for (a) the issuance of shares of Common Stock
upon the exercise of the Warrants, (b) the issuance of shares of Common Stock
by DeepTech upon receipt of the then current market price for the Common Stock
if there is a public market or in an arm's-length transaction with third
persons not affiliated with DeepTech for consideration equal to the fair market
value of such shares, or (c) shares of Common Stock issuable upon the exercise
of stock options granted to employees of DeepTech pursuant to a qualified stock
option plan approved by DeepTech's Board of Directors.

Holders of Warrants are not entitled, by virtue of being such holders, to
receive dividends or to consent or to receive notice as shareholders in respect
to any meeting of shareholders for the election of directors of DeepTech or any
other matter, or to vote at any such meeting, or any right whatsoever as
shareholders of DeepTech.

Certain Warrantholders (indicated by footnote on the table below) have a
put option pursuant to the terms of their Warrants. The put option grants the
Warrantholder the right to require the Company to purchase the Warrant, or if
the Warrant has been exercised, all of the shares of Common Stock then held by
the Warrantholder pursuant to exercise of such Warrant, upon the occurrence of
a Put Event (as defined in the Warrant). A Put Event is deemed to occur if (i)
DeepTech is acquired by merger, consolidation or other business combination by
any person or group of persons (other than Thomas P. Tatham) or (ii) the
acquisition, directly or indirectly, by any person or group of persons (other
than Thomas P. Tatham) of 50% or more of the capital stock of DeepTech or 50%
or more of the assets of DeepTech, in either case, by way of negotiated
purchase or otherwise. The purchase price upon exercise of a put option is
calculated by a formula using the highest price per share paid to shareholders
of the Company in such Put Event, or the cash value of any non-cash
consideration paid to the Shareholders, as determined by mutual agreement of
the Warrantholder and the Company or in the alternative, by determination of an
investment banking firm selected by the Warrantholder and the Company.

The Warrants also contain certain demand and piggyback registration
rights; indemnification agreements related to such registrations; certain
affirmative covenants of DeepTech and notice requirements of certain corporate
actions.

The table below includes certain information concerning the Warrants.

<TABLE>
<CAPTION>
WARRANT HOLDER NUMBER EXERCISE PRICE EXPIRATION DATE
-------------- ------ -------------- ---------------
<S> <C> <C> <C>
Citicorp USA, Inc. 618,750 $4.50 7/15/98
Citicorp USA, Inc. 328,125(1) $4.00 12/15/98
John E. Drury 26,666 $4.50 7/15/98
Alfred F. King III 2,500(1) $4.00 12/15/99
David N. King 2,500(1) $4.00 12/15/99
Lehman Brothers Holdings, Inc. 666,667 $4.50 7/15/2000
Jansen Noyes, Jr. 937(1) $4.00 12/15/99
Jansen Noyes, Jr. & Alfred King, Jr. TTEE U/W 1,250(1) $4.00 12/15/99
Nancy Noyes King FBO Alfred King III
Jansen Noyes, Jr. & Alfred King, Jr. TTEE U/W 1,250(1) $4.00 12/15/99
Nancy Noyes King FBO David N. King
</TABLE>

10
<PAGE> 12

<TABLE>
<CAPTION>
WARRANT HOLDER NUMBER EXERCISE PRICE EXPIRATION DATE
-------------- ------ -------------- ---------------
<S> <C> <C> <C>
Jansen Noyes, Jr. & Alfred King, Jr. TTEE U/W 1,250(1) $ 4.00 12/15/99
Nancy Noyes King FBO Susan K. Stickney
Christine M. Sanders 3,750(1) $ 4.00 12/15/98
Don A. Sanders 77,500 $ 4.50 7/15/98
Don A. Sanders 45,000(1) $ 4.00 12/15/98
Katherine U. Sanders 40,000 $ 4.50 7/15/98
Katherine U. Sanders 45,000(1) $ 4.00 12/15/98
Albert Stickney III 1,318(1) $ 4.00 12/15/99
Susan K. Stickney 4,372(1) $ 4.00 12/15/99
Thomas P. Tatham 825,000 $10.00 11/7/98
Thomas P. Tatham 1,343,749 $ 4.50 7/15/98
Roger B. Vincent, Sr. 25,111(1) $ 4.00 12/15/98
</TABLE>

(1) These Warrants each contain certain put options discussed above.

11
<PAGE> 13
SELLING STOCKHOLDERS

The following tables set forth the name of each Selling Stockholder, the
number of Securities owned by each Selling Stockholder immediately prior to the
Offering, the number of Securities registered hereby that each Selling
Stockholder may offer in the Offering, the number of Securities to be owned by
each Selling Stockholder upon completion of the Offering as contemplated hereby
and the percentage of total Securities to be owned by each Selling Stockholder
upon completion of the Offering as contemplated hereby. However, because the
Selling Stockholders may offer all or a portion of the Securities at any time
and from time to time after the date hereof, the exact number of Securities that
each Selling Stockholder may retain upon completion of the Offering cannot be
determined at this time. To the knowledge of DeepTech, none of the Selling
Stockholders has had any material relationship with the Company except as set
forth in the footnotes to the following table and as more fully described
elsewhere in this Prospectus (including the information incorporated by
reference in this Prospectus).

<TABLE>
<CAPTION>
NUMBER OF
SHARES TO
BE OFFERED OWNERSHIP
FOR THE AFTER THE OFFERING
OWNERSHIP OF SELLING ---------------------------
SHARES PRIOR STOCKHOLDER'S NUMBER PERCENT
SELLING STOCKHOLDER TO THE OFFERING ACCOUNT OF SHARES OF CLASS
------------------- --------------- ------------- --------- --------
<S> <C> <C> <C> <C>
Thomas P. Tatham 9,925,469(1)(2) 3,641,666 6,283,803 28.7%
Alpha Marine Services, Inc. 100,000(3) 100,000 0 *
Pete Barbara 8,000 4,000 4,000 *
Citicorp USA, Inc. 946,875(4) 946,875 0 *
DLJ Capital Corporation 1,391,675(5) 1,019,823 371,852 1.8%
DWW & Associates, Inc. 4,000 4,000 0 *
John E. Drury 35,556(6) 35,556 0 *
Bradbury Dyer, III 1,223 1,223 0 *
The Equitable Life Assurance Society 0 *
of the United States 325,744(7) 55,641 270,103 1.4%
F-W Oil Interests, Inc. 162,000 162,000 0 *
Alfred F. King III 4,000(8) 4,000 0 *
David N. King 4,000(8) 4,000 0 *
Scott M. Kleberg 2,459 2,459 0 *
Tom Landry, Jr. 9,766 9,766 0 *
Michael Lam 23,508(9) 10,000 13,508 *
Thurman Lauret 4,000 4,000 0 *
Lehman Brothers Holdings, Inc. 1,333,334(10)(11) 1,333,334 0 *
LFC Energy Equipment, Ltd. 5,469 5,469 0 *
Metropolitan Life Insurance Company 0 *
Separate Account EN 200,000(12) 200,000
M. H. Whittier Corp. 71,094 71,094 0 *
Mike Mullen 8,240 8,240 0 *
Jansen Noyes, Jr. 1,500(13) 1,500 0 *
Jansen Noyes, Jr. & Alfred King, Jr.
TTEE U/W Nancy Noyes King
FBO Alfred King III 2,000(14) 2,000 0 *
Jansen Noyes, Jr. & Alfred King, Jr.
TTEE U/W Nancy Noyes King
FBO David N. King 2,000(15) 2,000 0 *
Jansen Noyes, Jr. & Alfred King, Jr.
TTEE U/W Nancy Noyes King
FBO Susan K. Stickney 2,000(16) 2,000 0 *
Roy T. Oliver 7,364 7,364 0 *
Marshall B. Payne, Nominee 3,682 3,682 0 *
SAA Investments, Inc. 4,000 4,000 0 *
Christine M. Sanders 5,000(17) 5,000 0 *
Don A. Sanders 843,167(18) 176,667 666,500 3.6%
Katherine U. Sanders 100,000(19) 100,000 0 *
Grant E. Sims 745,000(20) 445,000 300,000 1.6%
Albert Stickney III 2,109(21) 2,109 0 *
Susan K. Stickney 7,000(22) 7,000 0 *
E.D. Terry 4,000 4,000 0 *
Glenn H. Tatham 347,730(23) 50,000 297,730 1.6%
Roger B. Vincent, Sr. 33,482(24)(25) 33,482 0 *
Frank Wade 468,625 315,625 153,000 *
L.E. Walker 8,000 8,000 0 *
Steven A. Webster 13,293(26) 13,293 0 *
</TABLE>

12
<PAGE> 14

*less than 1%

NUMBER OF
WARRANTS TO BE OWNERSHIP
OFFERED FOR THE AFTER THE OFFERING
OWNERSHIP OF SELLING -------------------------
WARRANTS PRIOR STOCKHOLDER'S NUMBER PERCENT
SELLING STOCKHOLDER TO THE OFFERING ACCOUNT OF WARRANTS OF CLASS
------------------- --------------- --------------- ----------- --------
<S> <C> <C> <C> <C>
Thomas P. Tatham(1) 2,168,749 2,168,749 0 *
Citicorp USA, Inc. 946,875 946,875 0 *
John E. Drury 26,666 26,666 0 *
Alfred F. King III 2,500 2,500 0 *
David N. King 2,500 2,500 0 *
Lehman Brothers Holdings, Inc. 666,667(11) 666,667 0 *
Jansen Noyes, Jr. 937 937
Jansen Noyes, Jr. & Alfred King, Jr.
TTEE U/W Nancy Noyes King FBO
Alfred King III 1,250 1,250 0 *
Jansen Noyes, Jr. & Alfred King, Jr.
TTEE U/W Nancy Noyes King FBO
David N. King 1,250 1,250 0 *
Jansen Noyes, Jr. & Alfred King, Jr.
TTEE U/W Nancy Noyes King FBO
Susan K. Stickney 1,250 1,250 0 *
Christine M. Sanders 3,750 3,750 0 *
Don A. Sanders 122,500 162,500 0
Katherine U. Sanders 85,000 45,000 0 *
Albert Stickney III 1,318 1,318 0 *
Susan K. Stickney 4,372 4,372 0 *
Roger B. Vincent, Sr. 25,111(25) 25,111 0 *
--------- --------- --- ---
Total 4,060,695 4,060,695 0 0%
========= ========= === ===
</TABLE>
*less than 1%

(1) Thomas P. Tatham is the Chairman and Chief Executive Officer of DeepTech,
and Chairman of Tatham Offshore and Leviathan Gas Pipeline Company.
(2) Includes 2,568,749 shares issuable upon the exercise of outstanding
warrants.
(3) Laney Chouest, a director of DeepTech, owns 30% of Alpha Marine Services,
Inc.
(4) Consists of 946,875 shares issuable upon the exercise of outstanding
warrants.
(5) Includes 1,019,823 shares issuable upon the exercise of outstanding
warrants.
(6) Includes 26,666 shares issuable upon the exercise of outstanding warrants.
(7) Includes 55,641 shares issuable upon the exercise of outstanding warrants.
(8) Includes 2,500 shares issuable upon the exercise of outstanding warrants.
(9) Michael Lam is a director of DeepTech.
(10) Includes 666,667 shares issuable upon the exercise of outstanding warrants.

13
<PAGE> 15
(11) A subsidiary of Lehman Brothers Holdings, Inc. (the "Lehman Lender") has
extended a loan to a wholly-owned indirect subsidiary of the Company,
RIGCO, pursuant to a syndicated Credit Agreement dated as of September 30,
1996 among RIGCO, as borrower, the other financial institutions (including
the Lehman Lender) from time to time parties thereto (the "RIGCO Lenders")
as amended (the "RIGCO Credit Agreement"). As additional consideration for
making the loan to RIGCO, another subsidiary of Lehman Brothers Holdings,
Inc. received warrants to purchase common stock of RIGCO.
(12) Consists of 200,000 shares issuable upon the exercise of outstanding
warrants.
(13) Includes 937 shares issuable upon the exercise of outstanding warrants.
(14) Includes 1,250 shares issuable upon the exercise of outstanding warrants.
(15) Includes 1,250 shares issuable upon the exercise of outstanding warrants.
(16) Includes 1,250 shares issuable upon the exercise of outstanding warrants.
(17) Includes 3,750 shares issuable upon the exercise of outstanding warrants.
(18) Includes 122,500 shares issuable upon the exercise of outstanding
warrants.
(19) Includes 85,000 shares issuable upon the exercise of outstanding warrants.
(20) Includes 300,000 shares issuable upon the exercise of outstanding stock
options.
(21) Includes 1,318 shares issuable upon the exercise of outstanding warrants.
(22) Includes 4,372 shares issuable upon the exercise of outstanding warrants.
(23) Glenn H. Tatham is the son of Thomas P. Tatham.
(24) Includes 25,111 shares issuable upon the exercise of outstanding warrants.
(25) Roger B. Vincent, Sr. is a Director of Tatham Offshore, and is a director
of an affiliate of Springwell Corporation, which served as a financial
advisor to the Company from April 1991 through November 1993. The Shares
and Warrants consist of securities held by record by Delaware Charter and
Guarantee Trust Company TTEE FBO Roger B. Vincent, Sr. IRA R/O.
(26) Includes 8,371 shares issuable upon the exercise of outstanding warrants.
(27) Consists of 6,741 shares issuable upon the exercise of outstanding
warrants.
(28) Westgate International, L.P. is also the beneficial owner of 850,000
shares of Series A Preferred Stock of Tatham Offshore and 25,000 shares of
Tatham Offshore Common Stock. A director of Tatham Offshore is employed
by a company which provides services to Westgate International, L.P.
(29) Consists of 10,000 shares issuable upon the exercise of outstanding
warrants.

14
<PAGE> 16
PLAN OF DISTRIBUTION

The Securities may be sold or distributed from time to time by or for the
account of the Selling Stockholders, or their pledgees on behalf of the Selling
Stockholders, in transactions (which may involve crosses and block
transactions) on Nasdaq or any national securities exchange or U.S.
inter-dealer quotation system of a registered national securities association
on which the Securities are then listed, in the over-the-counter market, in one
or more privately negotiated transactions (including pledges and gifts),
through the writing of options on the Securities, in a combination of such
methods of distribution or by any other legally available means. Such methods
of sale may be conducted by the Selling Stockholders at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at prices otherwise negotiated. The Selling Stockholders may effect
such transactions directly, or indirectly through broker-dealers or agents
acting on their behalf and, in connection with such sales, such broker-dealers
or agents may receive compensation in the form of commissions or discounts from
the Selling Stockholders and/or the purchasers of the Securities for whom they
may act as agent or to whom they sell Securities as principal or both (which
commissions or discounts might be in excess of customary commissions). To the
extent required, the names of the agents or broker- dealers, and applicable
commissions or discounts and any other required information with respect to any
particular offer of Securities by the Selling Stockholders, will be set forth
in a Prospectus Supplement.

The Selling Stockholders and any such underwriters, brokers, dealers or
agents that participate in such distribution may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities
Act. Neither DeepTech nor the Selling Stockholders can presently estimate the
amount of such compensation. DeepTech knows of no existing arrangements
between any Selling Stockholder and any other Selling Stockholder, underwriter,
broker, dealer or other agent relating to the sale or distribution of the
Securities.

Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of any of the Securities may not simultaneously
engage in market activities with respect to the Common Stock for a period of
nine business days prior to the commencement of such distribution. In addition
and without limiting the foregoing, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act; including without limitation Rules
10b-5, 10b-6 and 10b-7, which provisions may limit the timing of purchases and
sales of any of the Securities by the Selling Stockholders. All of the
foregoing may affect the marketability of the Common Stock.

DeepTech will not receive any of the proceeds from the sale of the
Securities offered hereby, but will bear all expenses incident to the
registration of the Securities under federal and state securities laws and the
sale of the Securities hereunder other than expenses incident to the delivery
of the Securities to be sold by the Selling Stockholders, including any
transfer taxes payable on any Securities, and any commissions and discounts
payable to underwriters, agents or dealers.

In order to comply with certain states' securities laws, if applicable,
the Securities will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock
may not be sold unless the Common Stock has been registered or qualified for
sale in such state or an exemption from registration or qualification is
available and is complied with.

LEGAL MATTERS

The validity of the Securities offered hereby will be passed upon for the
Company by Akin, Gump, Strauss, Hauer & Feld, L.L.P. Akin, Gump, Strauss,
Hauer & Feld, L.L.P. owns 235,357 shares of common stock of the Company.

EXPERTS

The audited consolidated financial statements of DeepTech and its
Subsidiaries incorporated by reference in this Prospectus have been audited by
Price Waterhouse LLP, independent accountants, as indicated in their report with
respect thereto and are included in reliance upon the authority of said firm as
experts in auditing and accounting.

The reports of Ryder Scott Company Petroleum Engineers, independent
petroleum engineers, and Netherland, Sewell & Associates, Inc., independent
petroleum engineers, and the respective information with

15
<PAGE> 17
respect to estimated reserves contained therein incorporated by reference in
this Prospectus and the Registration Statement have been so included in
reliance upon the authority of said firms as experts with respect to the
matters contained therein.

UNCERTAINTY OF FORWARD LOOKING STATEMENTS

Certain statements and information in this Prospectus (including documents
incorporated herein by reference, see "Incorporation of Certain Documents by
Reference") constitute forward-looking statements within the meaning of the
Federal Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are typically punctuated by words or phrases such as "anticipate,"
"estimate," "projects," "management believes," "DeepTech believes" and words or
phrases of similar import. Such statements are subject to certain risks,
uncertainties or assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Among the key factors that may have a direct bearing on DeepTech's
results and financial condition are: (i) competitive practices in the oil and
gas industry in which DeepTech competes, (ii) fluctuations in oil and gas
prices, (iii) environmental liabilities to which the Company may become subject
in the future which are not covered by an indemnity or insurance, (iv) the
impact of current and future laws and governmental regulations (particularly
environmental regulations) affecting the oil and gas industry in general and
the Company's operations in particular and (v) the ability of DeepTech and its
subsidiaries to secure additional capital to fund its operations.

16
<PAGE> 18
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in or
incorporated by reference in this Prospectus in connection with the offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company or the Selling
Stockholders. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create an implication that there has
been no change in the affairs of the Company since the date hereof. This
Prospectus does not constitute an offer to sell or the solicitation of an offer
to buy any security other than the shares of Common Stock and Common Stock
Purchase Warrants offered hereby, nor does it constitute an offer to sell or a
solicitation of an offer to buy any shares of Common Stock or Common Stock
Purchase Warrants by anyone in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information . . . . . . . . . . . . 2
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . 9
Use of Proceeds . . . . . . . . . . . . . . . 9
Description of Warrants . . . . . . . . . . . 9
Selling Stockholders . . . . . . . . . . . . 11
Plan of Distribution . . . . . . . . . . . . 14
Legal Matters . . . . . . . . . . . . . . . . 14
Experts . . . . . . . . . . . . . . . . . . . 14
Uncertainty of Forward
Looking Statements . . . . . . . . . . . . 15
</TABLE>

[DEEP TECH LOGO]

9,506,363 SHARES OF COMMON STOCK

4,060,695 COMMON STOCK PURCHASE WARRANTS

DEEPTECH
INTERNATIONAL INC.

PROSPECTUS

JUNE 26, 1997