UPDATE 1-U.S. natgas rig count unchanged at 369 -Baker Hughes

Fri Jul 26, 2013 1:29pm EDT
 
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* Gas-directed rig count flat after four straight gains
    * Horizontal rigs up 9 for the week
    * Oil rig count gains for second consecutive week

    NEW YORK, July 26 (Reuters) - The number of rigs drilling
for natural gas in the United States was unchanged this week at
369, data from Houston-based Baker Hughes showed on
Friday.
    The gas-directed rig count, which posted an 18-year low of
349 five weeks ago, had climbed in four previous weeks.
    The gains 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 hedge forward production
and keep output flowing, adding to already-high supplies.
    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 7 cents
at $3.575 per mmBtu just before the data was released, held at
about that level after the report.
    
    The oil-focused rig count rose by six this week to 1,401.
The oil rig count hit a nine-month high of 1,413 six weeks ago,
Baker Hughes data showed. The oil count is down 15 rigs, or 1
percent, from the same week last year.
    Baker Hughes reported horizontal rigs, the type often used
to extract oil or gas from shale, climbed nine this week to
1,067. The horizontal count is down almost 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.