Fri Jun 22, 2012 11:26pm IST
*
Gas-directed rig count falls to lowest since August 1999
* Horizontal rig count gains for first time in 5 weeks
* Oil drilling rigs hit 25-year high after drop last week
NEW YORK, June 22 (Reuters) - U.S. energy producers this week trimmed the number of rigs drilling for natural gas to a 13-year low, a report showed on Friday, as relatively low gas prices kept crimping profits and forcing some to slow dry gas operations.
The gas-directed rig count slid this week by 21 to 541, its eighth drop in nine weeks and the lowest since August 1999 when there were 531 gas rigs operating, data from Houston-based oil services firm Baker Hughes showed.
The gas rig count is down 42 percent since peaking last year at 936 in October. The months-long drop has fed expectations that producers were getting serious about stemming the flood of record gas supplies.
Baker Hughes also reported that horizontal rigs, the type often used to extract oil or gas from shale, rose for the first time in five weeks, climbing 3 to 1,165. Five weeks ago, the horizontal count hit an all-time high of 1,193.
Dry gas drilling has become largely uneconomical at current prices, but drillers have moved rigs to more lucrative shale oil and shale gas liquid plays which still produce plenty of associated gas that ends up in the market after processing.
Rising output from shale has made it difficult to slow overall dry gas production.
OIL DRILLING HITS NEW HIGH
Oil drilling rigs rose by 16 to a 25-year high of 1,421, Baker Hughes data showed.
Despite the decline, there were 41.7 percent more rigs drilling for oil this week, compared to last year when only 1,003 oil-drilling rigs were operational.
GAS PRODUCTION SLOWS, STILL NEAR RECORD HIGHS
Steady declines in dry gas drilling and planned output cuts by several key producers finally seems to be slowing output.
Analysts have said, however, that producer cuts so far, estimated at about 1 billion cubic feet per day, were not nearly enough to reduce supplies significantly.
Most analysts do not expect any major slowdown in gas output until later this year.
Recent U.S. Energy Information Administration data showed the agency slightly lowered its estimate for marketed gas production this year for a second straight month, expecting output to average 68.47 billion cubic feet per day.
But that would still be a record high, easily beating last year's record of 66.22 bcf per day by 3.4 percent.
The Baker Hughes report had little impact on gas prices.
Front-month natural gas futures on the New York Mercantile Exchange, which were up 5 cents at $2.632 per mmBtu just before the Baker Hughes data was released at 1 p.m. EDT, edged up slightly to about $2.645 after the report.