UPDATE 1-U.S. natgas rig count hits new 14-year low-Baker Hughes

Fri Apr 26, 2013 1:30pm EDT

Related Topics

* Gas-directed rig count slides, first drop in 3 weeks
    * Horizontal rigs slip, match 20-month low from early April
    * Oil rig count climbs for fourth time in 5 weeks

    NEW YORK, April 26 (Reuters) - The number of rigs drilling
for natural gas in the United States fell this week to the
lowest since May 1999, as producers continued to pull back from
dry gas drilling despite recent prices gains.
    The gas-directed rig count, which had gained slightly in two
previous weeks, slid by 13 this week to 366, data from
Houston-based Baker Hughes showed on Friday.
    Producers have mostly 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.
    But a 40 percent run-up in spot gas prices since
mid-February to a 21-month high of $4.429 per million British
thermal units just last week, had stirred concerns that gas
output, still flowing at or near record highs, could increase in
coming weeks.

    The oil-focused rig count rose by 10 to 1,381, its fourth
gain in five weeks, Baker Hughes data showed. The oil count is
up 53 rigs, or 4 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, fell by 13 this
week to 1,084, matching the 20-month low of 1,084 posted three
weeks ago. The horizontal count is down 9 percent from the
record high of 1,193 set last May.
    Drilling for natural gas has mostly been in decline for the
last 18 months. The count is down about 61 percent since peaking
in 2011 at 936, but so far production has not slowed much, if at
all, from the record high hit last year.
    The associated gas produced from more profitable shale oil
and shale gas liquids wells has kept dry gas flowing at a brisk
rate. The U.S. Energy Information Administration expects
marketed gas production to edge up slightly in 2013 to its third
straight yearly record.
    Gas futures prices, which were down about 6 cents in the 
$4.10 area just before the Baker Hughes data was released,
climbed about a penny after the report.
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