UPDATE 1-U.S. natgas rig count up for 4th week-Baker Hughes

Fri Jul 19, 2013 2:11pm EDT
 
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* Gas-directed rig count up for fourth straight week
    * Horizontal rigs unchanged for the week
    * Oil rig count gains for second time in three weeks

    NEW YORK, July 19 (Reuters) - The number of rigs drilling
for natural gas in the United States rose this week for the
fourth week in a row, climbing by seven to 369, data from
Houston-based Baker Hughes showed on Friday.
    The gas-directed rig count posted an 18-year low of 349 four
weeks ago. Recent rig gains have stirred concerns that the gas
price run-up in May to a 21-month high of $4.444 per million
British thermal units may have encouraged some producers to keep
dry gas flowing by hedging forward production.
    Producers had been mostly curbing dry-gas drilling in favor
of more profitable crude oil and liquids-rich plays such as
Eagle Ford in Texas and Marcellus in Appalachia.
    Gas futures prices on Friday, which were down about 1 cent
at $3.80 per mmBtu just before the data was released, initially
slipped about 2 cents after the report before bouncing back to
the $3.80 area.
    
    The oil-focused rig count rose by four this week to 1,395.
The oil rig count hit a nine-month high of 1,413 five weeks ago,
Baker Hughes data showed. The oil count is down 19 rigs, or 1.3
percent, from the same week last year.
    Baker Hughes reported horizontal rigs, the type often used
to extract oil or gas from shale, were unchanged this week at
1,058. The horizontal count is down 11 percent from the record
high of 1,193 set in May 2012.
    Drilling for natural gas has mostly been in decline for the
last 21 months. The count is down about 61 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 shale oil and shale gas
liquids wells has kept dry gas flowing at a brisk rate. The U.S.
Energy Information Administration still expects gas output in
2013 to post a record high for a third year.