UPDATE 1-U.S. natgas rig count up 1st time in 4 wks -Baker Hughes
* Gas rig count climbs seven to 428 * Oil rig count down, horizontal rigs up slightly NEW YORK, Feb 22 (Reuters) - The number of rigs drilling for natural gas in the United States rose this week for the first time in four weeks, as producers shrugged off relatively low gas prices and increased drilling activity, data from Houston-based oil services firm Baker Hughes Inc showed on Friday. The gas-directed rig count rose by seven to 428, only the second gain in seven weeks, according to Baker Hughes. Despite the gain, the gas count is hovering just above the 13-1/2-year low of 413 posted in early November. Producers have mostly been curbing dry-gas drilling in favor of more profitable oil and liquids-rich plays like Eagle Ford in Texas and Marcellus in Appalachia. The oil-focused rig count, which hit a 10-month low of 1,315 four weeks ago, fell by eight to 1,329, Baker Hughes data showed. The oil count is still up 64 rigs, or about 5 percent, from the same week last year. Baker Hughes also reported that horizontal rigs, the type often used to extract oil or gas from shale, rose by one this week to 1,140. The horizontal count, which has risen in three of the last four weeks, is still down about 4 percent from the record high of 1,193 set in May. Drilling for natural gas has mostly been in decline for more than a year - the count is down about 54 percent since peaking in 2011 at 936 - but so far production has not shown any significant signs of slowing. The associated gas produced from more-profitable shale oil and shale gas liquids wells has kept dry gas flowing at, or near, a record pace. The U.S. Energy Information Administration expects marketed natural gas production in 2013 to hit a record high for the third straight year. Gas futures prices, which showed little reaction to the report, are currently trading near the $3.30 per mmBtu area, which should be below the cost of most dry gas production.
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