Offshore drillers float higher, at least for a day

|By:, SA News Editor

Shares of offshore drillers are floating higher as Morgan Stanley’s team returns from a visit to Norway having seen increased signs of demand returning, with the newest most efficient rigs favored.

Stanley views Seadrill (SDRL +0.2%) as the best way to play an improving rig market, as it expects to lock up 2014-15 availability relatively soon, which should again tighten up the dividend and financing debate and result in a tightening of the yield.

Noble Corp. (NE +1%) is higher even as Susquehanna cuts its estimates following last week's fleet status update, noting that newbuild jackup Tom Prosser was contracted at a $203K dayrate, and the contract on the Paul Romano was cut from two years to six months, causing a $223M reduction in contracted revenue for 2015-16.

RDC +1.8%, ATW +1.5%, RIG +0.7%, DO +0.2%, ESV +0.1%.