UPDATE 1-U.S. natgas rig count slips for second week -Baker Hughes

Fri Sep 27, 2013 1:31pm EDT
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* Gas rig count sheds 10 in second straight decline
    * Horizontal rigs fall for first time in 3 weeks
    * Oil rig count down 7 to 1,362, 3rd drop in 4 weeks

    NEW YORK, Sept 27 (Reuters) - The number of rigs drilling
for natural gas in the United States fell this week for the
second week in a row, dropping by 10 to 376, data from
Houston-based Baker Hughes showed on Friday.
    The gas-directed rig count, which posted a six-month high of
401 two weeks ago, has increased in eight of the last 14 weeks
and is above the 18-year low of 349 set in late June.
    A rising gas rig count tends to stir talk that new pipelines
and processing plants, particularly in the East, could encourage
producers to hook up more wells and pump more supply into an
already well-supplied market.
    Gas futures prices on Friday, which were down 1.5 cents at
$3.552 per million British thermal units just before rig data
was released at 1:01 p.m. EDT (1701 GMT), climbed about a penny
after the report.
    The oil-focused rig count fell for the third time in four
weeks, shedding seven to 1,362. The oil rig count hit a
nine-month high of 1,413 in mid-June, Baker Hughes data showed.
The oil count is down 48 rigs, or 3.4 percent, from the same
week last year.
    Baker Hughes reported horizontal rigs, the type often used
to extract oil or gas from shale, had their first decline in
three weeks, losing six rigs to 1,085. The horizontal count is
down 9.1 percent from the record high of 1,193 set in May 2012.
    While the gas rig count is down 60 percent since peaking in
October 2011 at 936, gas production has not slowed much, if at
all, from the record high hit last year, because of 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.