U.S. natgas rig count slips to new 18-yr low

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UPDATE 1-U.S. natgas rig count slips to new 18-yr low-Baker Hughes 
13 minutes ago by Thomson Reuters 
* Gas-directed rig count hits lowest since June 1995 
* Horizontal rigs climbs for second straight week 
* Oil rig count up for sixth time in seven weeks 

NEW YORK, May 10 (Reuters) - The number of rigs drilling for 
natural gas in the United States fell this week for the third 
straight week, hitting its lowest level in nearly 18 years as 
producers continued to pull back from dry gas drilling. 
The gas-directed rig count slid by four this week to 350, 
its lowest since June 1995, when the count stood at 340, 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 the 40 percent run-up in spot gas prices since 
mid-February to a 21-month high of $4.444 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. Prices have since slipped to the $3.90s. 

The oil-focused rig count rose for the sixth time in seven 
weeks, climbing by nine to an eight-month high of 1,412, Baker 
Hughes data showed. The oil count is up 40 rigs, or 2.9 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, gained seven this 
week to 1,099. The horizontal count is still down 7.9 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 63 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 
On Tuesday, the U.S. Energy Information Administration 
raised its estimate for domestic natural gas production in 2013, 
expecting output this year to be up about 1 percent from last 
year. If realized, it would be the third straight year of record 
Gas futures prices, which were down about 5.8 cents in the 
$3.925 area just before the Baker Hughes data was released, were 
little changed from that level after the report.