UPDATE 1-U.S. natgas rig count nears six-month high -Baker Hughes

Fri Sep 13, 2013 1:33pm EDT
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* Gas-directed rig count climbs to near six-month high
    * Horizontal rigs rise for 2nd time in 3 weeks
    * Oil rig count down 4 to 1,361, 3rd drop in 4 weeks

    NEW YORK, Sept 13 (Reuters) - The number of rigs drilling
for natural gas in the United States climbed by seven this week
to near a six-month high of 401, data from Houston-based Baker
Hughes showed on Friday.
    It was the second straight weekly gain for the gas-directed
rig count, which posted an 18-year low of 349 in late June. The
count is the highest since March 22, when it stood at 418.
    Recent rig count gains - the count has risen in eight of the
last 12 weeks - have stirred concerns that new investment in gas
pipelines and processing plants, particularly in the East, are
allowing producers to hook up more wells and pump even more
supply into an already well-supplied market.
    Gas futures prices on Friday, which were up 2.2 cents at
$3.66 per million British thermal units just before rig data was
released at 1:01 p.m. EDT (1701 GMT), gained 1.5 cents after the
    The oil-focused rig count fell for the third time in four
weeks, dropping four to 1,361. The oil rig count hit a
nine-month high of 1,413 in mid-June, Baker Hughes data showed.
The oil count is down 52 rigs, or 3.7 percent, from the same
week last year.
    Baker Hughes reported horizontal rigs, the type often used
to extract oil or gas from shale, picked up one rig to 1,076,
the second gain in three weeks. The horizontal count is down
almost 10 percent from the record high of 1,193 set in May 2012.
    Despite recent gains, drilling for natural gas is down 57 
percent since peaking in October 2011 at 936.
    But so far gas production has not slowed much, if at all,
from the record high hit last year, boosted by the associated
gas produced from more profitable shale oil and shale gas
liquids wells.
    The U.S. Energy Information Administration still expects gas
output in 2013 to hit a record high for a third straight year.