UPDATE 1-Noble Corp tightens on costs in challenging market

* Trims 2010 contract drilling costs to $1.05-$1.15 bln

* Sees 2010 tax rate of 12-13 pct, vs 15.5 pct before

* Shares up 2.8 pct despite decline in oil price, sector

SAN FRANCISCO, April 22 (Reuters) - Noble Corp (NE.N), the third-largest offshore oil rig contractor by value, said on Thursday it is tightening up on spending due to challenging market conditions and lowered its cost estimate for 2010.

Noble beat Wall Street expectations with its first-quarter earnings [ID:nN21206581], helped by lower costs that were mainly the result of lower spending on major repair and maintenance items, Chief Financial Officer Tom Mitchell said.

He now expects 2010 contract drilling costs of between $1.05 billion and $1.15 billion, down from a range of $1.1 billion to $1.3 billion three months ago. Mitchell also said the effective tax rate would be 12 percent to 13 percent this year, versus a previous forecast of 15.5 percent.

Shares of the Switzerland-based company rose 2.8 percent to $42.74 in early trading on Thursday, despite a drop in crude oil prices CLc1 and the rest of the sector .OSX. (Reporting by Braden Reddall, editing by Gerald E. McCormick)