UPDATE 1-U.S. natgas rig count slips 1 to 353 -Baker Hughes

Fri Jun 14, 2013 1:39pm EDT

Related Topics

* Gas-directed rig count hovering just above 18-year low
    * Horizontal rigs slip for fourth time in five weeks
    * Oil rig count climbs to nine-month high

    NEW YORK, June 14 (Reuters) - The number of rigs drilling
for natural gas in the United States fell by one this week but
was still hovering just above an 18-year low posted five weeks
ago, data from Houston-based Baker Hughes showed on
Friday.
    The gas-directed rig count, which was unchanged in three
previous weeks, stood at 353 this week. The count slid to 350
during the week ended May 10, its lowest since June 1995. 
    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.
    Gas prices hit a 21-month high of $4.444 per million British
thermal units in early May and stirred concerns that producer
hedging at higher prices could keep dry gas output flowing.
    But gas futures prices on Friday were trading at about
$3.74, just above a three-month low of $3.71 hit on Wednesday.

    The oil-focused rig count climbed by seven this week to a
nine-month high of 1,413, Baker Hughes data showed. The oil
count is up eight rigs from the same week last year.
    Baker Hughes reported horizontal rigs, the type often used
to extract oil or gas from shale, lost ground for the fourth
time in five weeks, shedding two to 1,086. The horizontal count
is down 9 percent from the record high of 1,193 set in May 2012.
    Drilling for natural gas has mostly been in decline for the
last 20 months. The count is down about 62 percent since peaking
in October 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 shale oil and shale gas
liquids wells has kept dry gas flowing at a brisk rate. The U.S.
Energy Information Administration still expects gas output in
2013 to post a record high for a third year.
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