By Steve Gelsi

Energy stocks hammered out a gain in early action Thursday despite lower oil prices, as Noble Corp. (NE) and Ensco International Inc. (ESV) invigorated the oil service sector with stronger-than-expected earnings.

Occidental Petroleum Corp. (OXY) weighed in with a positive profit surprise as well, with shares of the oil and natural gas producer contributing to gains in the sector.

The NYSE Arca Oil Index rose 1.8% to 953 points. The NYSE Arca Natural Gas Index rose 2% to 442. The Philadelphia Oil Service Index rose 2.3% 170.

Ensco International rose 1.6% to $39.04. The company said second-quarter net income fell to $197.9 million, or $1.41 a share, from $293.5 million, or $2.05 a share in the year-ago period.

Earnings from continuing operations fell to $1.59 a share from $1.98 a share.

Revenue at the Dallas based oil service firm dropped to $511.6 million from $609.4 million. Wall Street analysts expected earnings of $1.46 a share and revenue of $512.6 million, according to a survey by FactSet Research.

"To further address the weakness in the premium jackup market, we are taking additional actions to reduce costs and align our fleet with the challenging market conditions," Ensco said.

Noble Corp. rose 3.4% to $33 after posting an increase in second-quarter net income.

Diamond Offshore Drilling Inc. (DO) rose 1% to $88.90 after posting stronger-than-expected earnings.

Crude futures subtracted 52 cents to $64.20.

-Steve Gelsi; 415-439-6400; AskNewswires@dowjones.com