U.S. offshore drilling stocks lifted by Bush plan

HOUSTON, July 14 Mon Jul 14, 2008 5:25pm BST

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HOUSTON, July 14 (Reuters) - Offshore drilling stocks including Noble Corp (NE.N) and Transocean Inc (RIG.N) received a boost on Monday from President George W. Bush's plans to lift an executive ban on offshore oil exploration, though analysts said any possible exploration remained years away.

Bush was due to announce his decision to allow exploration in the Outer Continental Shelf later on Monday as part of an effort to ease record crude oil prices. Congress would also need to lift its legislative moratorium on drilling.

"The reality is, you don't have any rigs available," said Roger Read, oilfield services analyst with Natixis Bleichroeder. "But anything that is going on that would increase the odds of additional drilling on virgin territories like off the coast of Florida is a positive for the U.S. drillers."

Record crude oil prices have driven up demand for offshore drilling rigs worldwide. Shipyards are busy building new rigs, but availability is quite tight through 2010.

And even if Congress lifted its ban on drilling, it would be at least two years before any exploration takes place, analysts said.

While bigger players like Noble and Transocean would benefit from more U.S. offshore drilling, smaller companies like Hercules Offshore Inc (HERO.O), Rowan Companies Inc (RDC.N) and ENSCO International Inc (ESV.N) may see more activity, Mike Breard, energy analyst with Hodges Capital Management, said.

"It would help more the companies that are more oriented to domestic drilling," Breard said. "But I think it would be very positive to see more drilling in the U.S. It would help the whole industry."

Shares of Transocean were up .5 percent, or 74 cents, at $145.69, while Noble was rose 1.6 percent to $59.85 in early afternoon trade on the New York Stock Exchange.

Rowan shares climbed 1.62 percent, or 69 cents, to $43.24 and Hercules was up 3.5 percent, or $1.17, at $35.08. ENSCO was up 2.3 percent, or $1.72, at $76.42 on the NYSE. (Reporting by Anna Driver in Houston)