UPDATE 1-U.S. natgas rig count up 1st time in 4 wks -Baker Hughes

Fri Feb 22, 2013 1:31pm EST

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* 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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