* Gas rig count falls 13 to 407 * Number of gas rigs in action lowest since May 1999 * Oil rig count up, horizontal rig count down NEW YORK, March 8 The number of rigs drilling for natural gas in the United States fell by 13 this week to the lowest level since May 1999 as weak gas prices continued to discourage drilling. The gas-directed rig count fell to 407, data from Houston-based oil services company Baker Hughes Inc showed on Friday, representing the fifth drop in six weeks. U.S. producers have largely been curbing dry-gas drilling in favor of more profitable oil and liquids-rich plays such as Eagle Ford in Texas and Marcellus in Appalachia. The oil-focused rig count, which hit a 10-month low of 1,315 six weeks ago, rose by eight to 1,341, Baker Hughes data showed. The oil count is up 45 rigs from the same week last year. Baker Hughes also reported that horizontal rigs, the type often used to extract oil or gas from shale, fell by 11 this week to 1,130. The horizontal count is down from the record high of 1,193 set last May. Drilling for natural gas has largely been in decline for more than a year. The count is down about 57 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. Data from the U.S. Energy Information Administration last week showed that gross natural gas output in December fell 1.1 percent from November's record high, the first time in four months that production failed to notch a new peak. Gas futures prices showed little reaction to the report and were trading late at around $3.63 per mmBtu.
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