Investors are closely watching the action in oil services names after the US government issued its first deepwater drilling permit since the BP catastrophe.

Contrary to what you might expect shares of some big drillers including Ensco, Diamond Offshore and Noble, the company that won the permit, all fell on Tuesday.

“It's a step in the right direction, but it's a very small step," says independent trading consultant John Troland in a Reuters interview. "A lot of harm has been done."

Early data from the Bureau of Ocean Energy Management for 2010 Gulf of Mexico oil output shows a decline to 1.48 million barrels per day from 1.58 million in 2009. Before the Gulf spill, the regulator had expected an increase to 1.6 million bpd in 2011.

Seven deepwater rigs have now moved out of the Gulf of Mexico as a result of the permit shortage.

However not everyone is pessimistic.

"The permit is significant because it gives operators and contractors a road map to getting wells approved in the Gulf of Mexico," says Joe Hill, director of oil services research at energy investment bank Tudor Pickering Holt in a Reuters interview.

"We now have a template that has been completed by Noble that should allow people to look at it and follow."

In other words Noble Energy's permit may help others navigate the new regulatory process.

Considering as many as 60 rigs are in the Gulf waiting to get the go-ahead how should you game the oil services sector, now?

Find out from Robert MacKenzie of FBR Capital Markets. Watch the video now!

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