UPDATE 2-Noble signs for $4 bln in Brazil rig contracts

(Adds analyst comment, details, byline; Updates share price)

By Anna Driver

HOUSTON, March 31 (Reuters) - Noble Corp (NE.N) said on Monday it signed a memorandum of understanding for contracts possibly worth $4 billion with Brazil's Petrobras (PETR4.SA) (PBR.N), sending the shares of the offshore oil and gas drilling contractor up 5 percent.

Under the planned contracts, which have a combined total length of 29 years, five deep-water drilling rigs currently operating off Brazil would extend their work for Petrobras, bringing Noble's total backlog to more than $10 billion.

Brazil is seen as a hot market for oilfield service companies as state oil company Petrobras will need to spend heavily to develop complex offshore fields including its massive Tupi find in the Santos basin.

"In our opinion, the offshore drilling markets will remain tight for several years," Mark Urness, an analyst with Calyon Securities, wrote in a note to clients. "This is expected to drive sharp earnings growth for Noble in the near future."

As part of the agreement with Petrobras, three of Noble's drill ships will be upgraded, each at a cost of about $175 million. The rigs will be taken out of service for about 150 days, with Petrobras absorbing some of the cost for shipyard time.

Under the proposed deal, the Noble Paul Wolff, a dynamically positioned semisubmersible rig, will have a dayrate of $490,000, up from its prior rate of $163,000 to $165,000.

Another semisubmersible, the Noble Therald Martin, will be booked at a rate of $295,000 per day, up from $113,000 to $115,000.

Upon completion of upgrades, the drill ship Noble Roger Eason will go to work for a dayrate of about $400,000, up from $136,000 to $138,000.

The Noble Leo Segerius drill ship will be booked at a rate of $345,000 per day, up from current rates of $123,000 to $125,000, and the Noble Muravlenko won a contract for about $330,000 per day, up from $119,000 to $121,000.

The Sugar Land, Texas-based company's shares rose $2.46, or 5 percent, to $50.51 in late morning trading on the New York Stock Exchange. The stock was outperforming the Philadelphia Stock Exchange index of oilfield service companies .OSX, which climbed more than 2 percent to 283. (Editing by Maureen Bavdek)