UPDATE 1-U.S. natgas rig count down 7 to 380-Baker Hughes

Fri Aug 30, 2013 1:34pm EDT

Related Topics

* Gas-directed rig count slips, 3rd drop in 4 weeks
    * Horizontal rigs gain for 2nd time in 3 weeks
    * Oil rig count up 6 to 1,388, 2nd rise in 3 weeks

    NEW YORK, Aug 30 (Reuters) - The number of rigs drilling for
natural gas in the United States fell by seven this week to 380,
data from Houston-based Baker Hughes showed on Friday.
    It was the third drop in four 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 10 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 4.1 cents at
$3.577 per million British thermal units just before the data
was released, climbed about 1 cent after the report.
    
    The oil-focused rig count rose for the second time in three
weeks, climbing six rigs to 1,388. The oil rig count hit a
nine-month high of 1,413 in mid-June, Baker Hughes data showed.
The oil count is down 31 rigs, or 2.2 percent, from the same
week last year.
    Baker Hughes reported horizontal rigs, the type often used
to extract oil or gas from shale, picked up three rigs to 1,078,
their second gain in three weeks. 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 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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