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Now that the temporary U.S. moratorium on deepwater oil drilling has been lifted, the industry is starting to feel the positive effects. Shortly following the October 12 announcement of the ban lift, shares in offshore drilling service companies like Diamond Offshore, Inc. and Transocean LTD increased by over two percent. Drilling companies affected by the ban are slowly beginning to get into compliance with the new rules and regulations for deepwater projects.

The most aggressive drilling companies will once again see capital returns that are impressive. Shareholders benefit when the stock price increases as well as through dividends paid. Large drilling companies are expected to continue their deepwater search for oil, resulting in high revenues.

Some drilling companies have managed to stay undervalued in historical terms. Investors should look at these as well as companies with global, diversified operations. This will ensure that the new regulations do not have as much of an impact on share price.

Noble, an offshore oil and gas drilling contractor based in Switzerland, is an investment recommended by some analysts. Noble’s fleet includes 69 offshore drilling units, the second largest fleet after TransOcean, which has a fleet of 138 drilling units. Noble obtains 24 percent of its business from the Gulf of Mexico and 38 percent from off the Brazilian coast. The company’s biggest customer by far is Shell.

Pride International, whose shares rose 30 percent in the wake of the BP oil spill, is another company to consider. Diamond Offshore is a another contractor that engages in offshore deepwater subsea well drilling and represents a wise investment. As deepwater drilling projects begin in rougher seas, investors may even want to consider expanding the portfolio to include rig manufacturers such as Ocean Rig ASA. The company’s rigs are designed for extreme weather and ultra deepwater conditions.