UPDATE 1-U.S. natgas rig count down 1 to 387-Baker Hughes

Fri Aug 23, 2013 1:24pm EDT

Related Topics

* Gas-directed rig count slips, 2nd drop in 3 weeks
    * Horizontal rigs decline for 2nd time in 4 weeks
    * Oil rig count off 15 to 1,382, 3rd drop in 4 weeks

    NEW YORK, Aug 23 (Reuters) - The number of rigs drilling for
natural gas in the United States fell by one this week to 387,
data from Houston-based Baker Hughes showed on Friday.
    It was the second drop in three weeks for the gas-directed
rig count, which posted an 18-year low of 349 in late June.
    Recent rig count gains - the count has risen in six of the
last nine weeks - have stirred concerns that new investment in
gas pipelines and processing plants, particularly in the East,
are allowing producers to hook up more wells and pump even more
supply into an already well-supplied market.
    Gas futures prices on Friday, which were down 5.5 cents at
$3.49 per million British thermal units just before the data was
released, showed little reaction to the report.
    
    The oil-focused rig count fell for the third time in four
weeks, shedding 15 rigs to 1,382. The oil rig count hit a
nine-month high of 1,413 in mid-June, Baker Hughes data showed.
The oil count is down 26 rigs, or 1.8 percent, from the same
week last year.
    Baker Hughes reported horizontal rigs, the type often used
to extract oil or gas from shale, logged a second decline in
three weeks, slipping by two this week to 1,075. The horizontal
count is down almost 10 percent from the record high of 1,193
set in May 2012.
    Drilling for natural gas has mostly been in decline for the
last 22 months. The count is down nearly 59 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 more profitable 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 hit a record high for a third straight year.
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