WRAPUP 2-Bill Barrett, Cimarex Q3 profits lag Street

* Bill Barrett ups FY production outlook

* Cimarex sees 18 rigs by mid-Jan 2010

* Bill Barrett Q3 shr $0.18 vs est of $0.35

* Cimarex Q3 shr $0.46 vs est of $0.63

* Cimarex shares up 6 pct; Bill Barrett down 7 pct (Recasts; Adds analyst comments, details, updates share movement)

By Arup Roychoudhury

BANGALORE, Nov 3 (Reuters) - Oil and gas exploration and production companies Bill Barrett Corp (BBG.N) and Cimarex Energy Co (XEC.N) reported lower-than-expected third-quarter profits, hurt by higher expenses and lower commodity prices, but said they are increasing their drilling activity.

The global economic slowdown has curbed demand for fuel to run power plants and factories. In response, U.S. natural gas stockpiles reached record levels, causing prices to fall 66 percent from the 2008 third quarter.

However, U.S. oil prices CLc1 have rebounded and the first time in a year averaged $68 a barrel last quarter. Gas prices have also been rebounding from their lows.

This rebound is leading oil and gas producers, who had earlier been cutting spending on projects, to rethink their drilling plans.

While Bill Barrett increased its full-year production outlook, Cimarex said it will increase its rig count to 18 by mid-January 2010. [ID:nWNAB9253]

"They are going from 11 to 18, so that's a pretty big ramp, mostly on the oil side, to the extent that they can hedge more of their gas and still lock in their returns. You might even see more upside to those 18 rigs," Pritchard Capital Partners analyst Raymond Deacon said by phone.

Cimarex's fourth-quarter exploration and development capital is projected to be in the range of $130 million to $180 million for a full-year 2009 investment of about $500 million to $550 million, company executive Thomas Jorden said on a conference call with analysts.

The company now expects full-year production of 455 to 460 million cubic feet equivalent per day (mmcfe/d), compared with its earlier forecast of 450 to 465 mmcfe/d. Cimarex also forecast fourth-quarter production of 440 to 455 mmcfed.

Bill Barrett raised its 2009 production forecast to 88 to 89 billion cubic feet equivalent of natural gas (bcfe) from 86 to 88 bcfe.

In a conference call with analysts, Bill Barrett Chief Executive Fred Barrett said the company now expects full-year production growth of 13 to 15 percent.