WINDERMERE, Florida (Stockpickr) -- The Obama administration on Tuesday ended the moratorium on offshore drilling in the Gulf of Mexico seven weeks early, after coming under pressure from the oil industry. This was welcome to news to many of the offshore drilling companies that operate in the Gulf. Many of these companies can now return to business as normal and restart their Gulf operations.

The drilling moratorium was put into effect after the Deepwater Horizon drilling rig exploded last April, killing 11 people and causing the largest oil spill in U.S. history.

The administration has said that new rules should help to prevent a similar accident in the future. Some of those new rules include new standards for equipment that must be inspected and certified by an independent engineer. Another rule requires offshore drillers to develop comprehensive workplace safety plans.

Under the new guidelines, an offshore driller must have their CEO certify that any rig that is going to operate in the Gulf must meet all of the new and existing rules. Offshore drilling operations will not be allowed to start until this step taken.

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Hopefully these new rules and guidelines will help to prevent a future tragedy like the one we saw in April. I think it's safe to say that nobody wins from a tragic oil spill -- not the oil companies, not the local communities and not the political powers.

Not all offshore drillers are jumping up and down about this news. The National Ocean Industries Association released a statement that said: "Our companies remain doubtful that this announcement is anything more than symbolic until permits are actually issued for new drilling."

Michael Bromwich, director of the Bureau of Ocean Energy, said that permits for renewed deep-water drilling are likely to be issued before the end of the year.

If permits do really start getting issued by the end of the year, then investors have plenty of time to start trading and looking for the best opportunities in offshore drilling stocks.

The obvious plays are BP ( BP - Get Report), Transocean ( RIG - Get Report) and Oceaneering International ( OII - Get Report), all of which were involved with the Deepwater Horizon rig. I expect these stocks to continue to lift higher now that moratorium is over. However, all of these names have already put in big runs, so I am not so sure these are the best ways to play the lifting of the ban.

I think market players might be better served by looking for small- to mid-cap offshore drilling plays that either experienced sharp selloffs following the BP rig explosion or are now in a great position to win new business due to the new standards and rules.

One name that looks very attractive is Seahawk Drilling ( HAWK). This company operates a jackup rig business that provides contract drilling services to the oil and natural gas exploration and production industry in the Gulf of Mexico. This company has a market cap of $117 million and trades at a price-to-book of 0.27. Seahawk Drilling has a very strong balance sheet, with $47 million in total cash on hand and only $6.04 million in total debt.

Since April, shares of Seahawk have plunged 51% from well over $15 a share to its current price of around $9.60. That's a massive decline, but the stock has rebounded nicely off its bottom hit in August at around $6.79. I think there are plenty of gains ahead for Seahawk Drilling now that the moratorium has been lifted for drilling in the Gulf of Mexico.

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Some of those gains could come from short-covering if the stock can continue to rebound. Currently, over 20% of the tradable float of 7.8 million is sold short as of Sept. 15. Since Seahawk has such a low float and high short interest, the stock could see a very powerful short squeeze in the near future.

Another name that looks very interesting is Hercules Offshore ( HERO). This company, together with its subsidiaries, provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the U.S., Gulf of Mexico and internationally. Hercules has a current market cap of $296 million and trades at a price-to-book of 0.31.

Since April 1, shares of Hercules are down a whopping 37.5% after the stock dropped from over $4 a share to its current price of around $2.59. From a technical perspective, if the stock can clear some near-term overhead resistance at around $2.78 a share, then I think a run back towards the 200-day moving average at $3.40 is very achievable.

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Keep in mind that more than 6.3% of the tradable float of 110 million shares is currently sold short as of Sept. 15. This could help to power the stock higher now that the moratorium has been lifted one month early for drilling in the Gulf of Mexico.

Hornbeck Offshore Services ( HOS - Get Report) could be another great small-cap play for renewed offshore drilling in the Gulf of Mexico. This company, through its subsidiaries, operates offshore supply vessels, multi-purpose support vessels, and a shore-base facility to provide logistics support and specialty serves to the offshore oil and gas exploration and production industry, primarily in the U.S., Gulf of Mexico, and select international markets.

If permits can start be reissued in the Gulf of Mexico, then Hornbeck's services will be in high demand as the big players move back into the area to start fresh drilling projects.

Hornbeck Offshore has a market cap of $544 million, trades at a forward P/E of 15.83 and has a price-to-book of 0.68. Since April 1, this stock is actually up 3.88%, which is a sign of strength when you consider that many of the offshore drilling-related stocks are down considerably since the Deepwater Horizon exploded.

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From a technical perspective, market players should watch for Hornbeck to take out overhead resistance at around $22.71 a share. A move above that level should set the stock up to challenge its May highs of $25.75 a share. If the stock can get above that area, then there is very little resistance for the shares until around $30.50.

I like the upside potential here in Hornbeck, especially when you consider the fact that the bears are leaning all over this name. Currently, more than 9.7% of the tradable float of 21 million shares is sold short as of Sept. 15.

If Hornbeck can release a decent earnings report on Nov. 4, or at least provide a rosy outlook now that the offshore drilling ban is lifted, then the stock could easily setup to squeeze out more shorts and head higher.

One company that could benefit from the new standards put into place for offshore drilling in the Gulf of Mexico is Newpark Resources ( NR - Get Report), a diversified oil and gas industry supplier that operates in three business segments. Those segments include fluid systems and engineering, mats and integrated services, and environmental services. Newpark provides its product and services to drillers in the Gulf Coast, as well as many other regions around the globe.

Newpark has a market cap of $797 million, trades at a forward P/E of 14 and has a price-to-book of 2.00. Since April 1, this stock has ripped higher, trading up 36% from $.4.77 to its current price around $8.55 as share. Clearly, investors have been bidding this stock up in anticipation that their services will be in higher demand as regulations and new rules for drilling increase.

From a technical perspective, market players should now watch for shares of Newpark to take out some overhead resistance at around $9.45 a share. A move above that level would set the stock up to print brand new 52-week highs.

Again, you have another situation where the bears are leaning all over an offshore drilling play, and unfortunately they're not doing a very good job of knocking this stock down. Currently, 7.9% of the tradable float of 88 million shares is sold short as of Sept. 15. If Newpark can manage to take out $9.50 a share, then it could spark a short squeeze that will take the stock much higher.

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Keep in mind that the next area of major resistance doesn't come into play until Newpark reaches $13.30. That's why a move above $.9.50 to $10 is very important for this stock.

To see more small-to-mid cap offshore drilling stocks, check out the Offshore Drilling Stock Play portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.