July 18 (Bloomberg) -- Noble Corp., the fourth-largest U.S. offshore oil and gas driller, said second-quarter net income rose 61 percent as worldwide rig demand pushed daily rent for its offshore equipment higher.

Net income rose to $290 million, or $2.16 a share, from $179.8 million, or $1.30, last year, the Sugar Land, Texas-based company said today in a statement. Revenue climbed 40 percent to $726 million.

A boom in offshore exploration and development is creating a shortage of available drilling rigs and driving rent rates higher. The average international dayrate for a deepwater drilling rig was $494,957 in June, up 13 percent from a year ago, according to publisher ODS-Petrodata Inc.

``The international jack-up market is still fairly robust, but deepwater is still getting most of the attention; we're still seeing long contract terms with large dayrates,'' said Mike Drickamer, an analyst with Morgan Keegan & Co Inc., in a July 11 interview. Drickamer rates Noble stock ``outperform'' and doesn't own any.

New Contracts

Noble also announced a pair of new contracts for a deepwater semi-submersible rig, the Noble Max Smith, and a deepwater drillship, the Noble Leo Segerius, for work offshore Mexico and Brazil at dayrates of $484,000 and $525,000, respectively.

``It probably suggests a little more strength'' in the deepwater market, said Judson Bailey, an analyst at Jefferies & Co. who rates Noble a ``buy'' and owns no shares. ``The rate is probably higher than most had anticipated.''

Today's earnings include an 8-cent per share charge related to a unit sale, internal probes of operations in Nigeria, and the retirement of an executive, the company said.

Noble was expected to earn $2.14 a share, the average of 25 analyst estimates compiled by Bloomberg.

``It was a couple pennies better'' than anticipated, said Credit Suisse analyst Arun Jayaram, who rates the company neutral and owns no shares. Jayaram also predicted $2.14 a share.

Noble's profit was limited by a 17 percent rise in contract drilling costs in the second quarter. Noble and other offshore drillers are facing increasing labor and equipment costs as the rig market continues to tighten in many areas worldwide.

Shallow-Water Markets

Rents vary by region for shallow-water jack-up rigs, which have retractable legs that extend to the sea floor. The average dayrate for jack-ups working offshore West Africa was $160,000 in June, up 11 percent from a year ago, according to ODS.

Noble's fleet of 56 mobile offshore rigs is spread throughout shallow-water markets in the Middle East and India and is working on deepwater exploration in Brazil and the U.S. Gulf of Mexico. In addition to the 56 rigs now working, Noble has contracted to build three new jack-up rigs capable of drilling in 400 feet of water and is upgrading three semi-submersibles for deepwater work.

The average second-quarter rent for Noble's deepwater semi- submersible rigs in the U.S. Gulf of Mexico rose to $343,754 a day from $273,779 a day a year earlier, the company said today.

International rates for its jack-up rigs rose to $112,804 a day from $72,601 last year, spurred in part by greater drilling activity in the Middle East, where Noble had 14 jack-ups working as of its June 26 fleet status report.

The statement was released after the close of regular trading on U.S. markets. Shares of Noble rose $1.81 to $100.36 in New York Stock Exchange composite trading.

Among major U.S. drilling contractors, Noble is the first to report second-quarter earnings.

Houston-based Transocean Inc., the world's largest offshore driller by market value, plans to release its earnings Aug. 1. GlobalSantaFe Corp., the second-biggest offshore driller, is due to report later the same day. Diamond Offshore Drilling, Inc., the third-largest driller, reports July 26.

(Noble Corp. will discuss second-quarter results on a Web cast tomorrow at 2 p.m. New York time. To listen, go to the company's Web site at http://www.noblecorp.com.)

To contact the reporter on this story: Amy Strahan in Houston at astrahan@bloomberg.net.

Last Updated: July 18, 2007 19:44 EDT