Attractive prospects at current oil and gas prices and a shortage of rig equipment are catapulting dayrates for offshore as well as onshore rigs. "Jackups in the Gulf of Mexico have begun to sign meaningfully higher rates, well beyond our original expectations," reports Angeline M. Sedita, senior vice president of oil-service equity research at Lehman Brothers. She expected that, with eight rigs destroyed in recent hurricanes, up to 30% higher dayrates in the Gulf; instead, several new contracts are for 60% higher rates, she reports. The big winners of higher dayrates will be Todco (NYSE: THE), Ensco International (NYSE: ESV) and Rowan Cos. (NYSE: RDC), and, to a lesser degree, GlobalSantaFe Corp. (NYSE: GSF), Diamond Offshore Drilling (NYSE: DO), Pride International (NYSE: PDE) and Noble Corp. (NYSE: NE), she says. Transition-zone driller Todco's THE 150 recently was signed to a one-month contract with Arena Resources; THE 152 was signed to two one-well contracts with Royal Production; and THE 250 was hired on a one-month contract by McMoRan Exploration. All of the new-contract dayrates were in the low-$80,000s, Sedita reports, up from between $50,000 and the mid-$60,000s. Sedita rates THE shares Overweight. "We view these [new] rates as noteworthy, particularly as the rates are not for long-legged or high-specification rigs." Meanwhile, offshore driller Ensco has secured a one-year contract for a Gulf jackup at $140,000 per day, up from $85,000, to begin work for Anadarko Corp. in January, she adds. As for on- and offshore driller Rowan, it recently signed three 116-C Gulf jackups at $130,000 per day. And the Gorilla VI jackup was hired by El Paso Corp. for three deep-shelf Gulf gas wells at $170,000 per day. The Bob Keller was hired on a one-year contract at $165,000 per day for the first six months and $170,000 thereafter. For more on this, see the December issue of Oil and Gas Investor. For a subscription, call 713-993-9320, ext. 126.