UPDATE 1-U.S. natgas rig count flat for 4th week at 354 -Baker Hughes
* Gas-directed rig count steady, just above 18-year low * Horizontal rigs slip for third time in four weeks * Oil rig count also drops slightly, still near 8-month high NEW YORK, June 7 (Reuters) - The number of rigs drilling for natural gas in the United States this week remained unchanged for the fourth straight week, hovering just above an 18-year low posted in early May, data from Houston-based Baker Hughes showed on Friday. The gas-directed rig count stood at 354 after sinking to 350 during the week ended May 10, its lowest since June 1995. Producers have mostly 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. But gas prices, which hit a 21-month high of $4.444 per million British thermal units in early May, stirred concerns that producer hedging at higher price levels could keep dry gas output flowing. Gas futures prices on Friday fell to a three-month low of $3.814 per million British thermal units. The oil-focused rig count fell for the third time in four weeks, dropping by four to 1,406. The oil count posted an eight-month high of 1,412 four weeks ago, Baker Hughes data showed. The oil count is down eight rigs from the same week last year. Baker Hughes reported horizontal rigs, the type often used to extract oil or gas from shale, have also lost ground in three of the past four weeks, shedding one to 1,088. The horizontal count is down nearly 9 percent from the record high of 1,193 set in May 2012. Drilling for natural gas has mostly been in decline for the last 19 months. The count is down about 62 percent since peaking in October 2011 at 936, but so far production has not slowed much, if at all, from the record high hit last year. The associated gas produced from more profitable shale oil and shale gas liquids wells has kept dry gas flowing at a brisk rate. The U.S. Energy Information Administration still expects output in 2013 to post a record high for a third year. Gas futures prices, which were up about 1 cent in the $3.84 area just before the Baker Hughes data was released, slipped about a penny after the report.
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