UPDATE 1-US natgas rig count up sharply from 14-mth low-Baker Hughes

Fri Mar 15, 2013 2:02pm EDT
 
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* Gas rig count up 24 to 431
    * Biggest jump in over three years
    * Oil rigs unchanged, horizontal up 1

    NEW YORK, March 15 (Reuters) - The number of rigs drilling
for natural gas in the United States rose by the largest number
in over three years this week, bouncing of a 14-month low as gas
prices continued their march higher, according to data from oil
service firm Baker Hughes on Friday. 
    The natural gas rig count has been in sharp decline since
2010 as tumbling prices made drilling for dry gas largely
uneconomic, but prices have rallied 17 percent this year,
potentially making natural gas extraction more attractive. 
    The count rose by 24 to 431, the data showed, the first rise
in three weeks. It was the biggest gain since January 2010 and
came on the back of five drops in the previous six weeks.
    U.S. producers have largely been curbing dry-gas drilling in
favor of more profitable oil and liquids-rich plays such as
Eagle Ford in Texas and Marcellus in Appalachia.
 
    The oil-focused rig count, which hit a 10-month low of 1,315
six weeks ago, was unchanged at 1,341, Baker Hughes data showed.
The oil count is up 24 rigs from the same week last year. The
horizontal rig count rose 1 to 1,131.
    While gas prices have risen sharply in recent weeks, traders
and analysts were skeptical that the one rig count jump
represented a turnaround for gas drilling. 
    "I doubt that we'd see a reaction to prices that quickly,"
said Tim Evans, energy specialist at Citi Futures in New York.
"There could have been some weather-related swings too - halting
drilling due to cold and then restarting."
    Drilling for natural gas has largely been in decline for
more than a year since peaking in 2011 at 936.
    Gas futures prices pared gains and slid about one cent
immediately after the report, but remained around $3.86 per
million British thermal units, just under a 3-1/2 month high hit
earlier in the day.