Philadelphia Stock Exchange Oil Service Index

was lately in negative territory, but its components got a confidence boost from Carol Lau at

Banc of America Securities

yesterday after the close. Lau raised price targets on the offshore drillers she covers a total of 24%, which represents an increase on the upside of about 34% from current price levels. She said her firm believes the offshore drilling industry is still near the beginning of a long, sustained upcycle, which could span three to five years.

The research note said she was forecasting earnings growth in the industry of 143% for 2001 and 74% for 2002. And she was continuing to recommend an overweight position in the group with buy and strong buy ratings across the board on the 10 oil drillers Banc of America covers.

Lau started coverage of

Marine Drilling

( MRL) and

Pride International

( PDE) with buy ratings. She upped



to a strong buy from buy. Marine was lately off 0.6% to $31.19. Pride was off 4.7% to $27.63. And Rowan was down 1.7% to $32.81.

Lau maintained Banc of America's ratings of

Diamond Offshore

(DO) - Get Diamond Offshore Drilling, Inc. Report

, buy;

TheStreet Recommends



, strong buy;

R&B Falcon

(FLC) - Get Flaherty & Crumrine Total Return Fund Inc Report

, strong buy;

Global Marine

( GLM), strong buy;

Noble Drilling

(NE) - Get Noble Corporation plc Report

, strong buy;

Transocean Sedco

(RIG) - Get Transocean Ltd. Report

, strong buy; and

Santa Fe International

( SDC), strong buy.'s

Brett D. Fromson wrote about the

untapped investment opportunities in oil and gas in an earlier story.