UPDATE 1-Morgan Stanley says positive on U.S. offshore drillers

Feb 19 (BestGrowthStock) – Morgan Stanley said it was incrementally
positive on U.S. offshore drillers, citing a surge in jack-up
rig demand, and named Ensco International Plc (ESV.N: ), Noble
Corp (NE.N: ) and Transocean Ltd (RIG.N: ) as its top picks in the
sector.

The brokerage sees rig utilization going up to 85 percent
by mid-year and 95 percent by year-end, if recent demand trends
hold up. The current utilization stands at just under 80
percent.

“We expect jack-up utilization above 85 percent to provide
a backdrop for firmer pricing, driving positive earnings
revisions,” analyst Ole Slorer wrote in a note to clients.

By the back half of 2010, the analyst expects rig demand to
outpace available supply.

Slorer, who raised both Ensco and Transocean to
“overweight” from “underweight”, said he sees jack-up tendering
activity at 49 rigs in the next quarter and 90 rigs the
following quarter.

Shares of Ensco closed at $41.97 and those of Transocean
closed at $83.32 Thursday on the New York Stock Exchange.

For the rating changes, please double click on
[ID:nWNAB9428]

Stock Market Research

(Reporting by Krishna N. Das in Bangalore; Editing by Aradhana
Aravindan)

UPDATE 1-Morgan Stanley says positive on U.S. offshore drillers