Following the rise in natural gas prices, worldwide drilling rigs have reached their highest levels in nearly three years, according to the latest figures from

Baker Hughes

. The total rig count worldwide was 2,212 for the period ended December 2000, up nearly 100 rigs from November. That's the highest figure since February 1998, when rig counts reached 2,290.

"There continues to be a rush for natural gas, so you continue to see this rig activity rise," said Kyle Leak, a spokesman at Baker Hughes. That's especially true in the U.S., where there is a shortage of natural gas supplies. The U.S. is now at its highest rig level in a decade, having added 30 new rigs in the latest period.

The news should bode well for exploration and production companies like

Apache

(APA) - Get Report

and energy-service companies like

Halliburton

(HAL) - Get Report

. Rig counts are typically a leading indicator of supply, and in the short run, as long as there is demand for that supply, these companies should benefit, according to

Christopher Edmonds

, who covers energy issues for

TSC

. (

TSC

monthly publishes worldwide rig counts on its

Metrics Page.)

The demand looks strong. The U.S. government warned Monday that there is no end in sight for rising natural gas prices and predicted that consumers could face 70% increases in their winter bills (October-March) vs. last year. The previous estimate called for 50%-55% increases in consumer bills vs. last year. According to

Energy Information Administration

(EIA), the statistical arm of the U.S.

Department of Energy

, the latest increases would be the "highest season-over-season growth rate since at least 1975."

Consumers in the Northeast and California are expected to be hit hardest by rising prices. The EIA predicts the average bill in the Northeast will be $1,061, an increase of $301, or 40%.

Worldwide Rig Count (Since Jan. 1998)

Source: Baker Hughes

California residents, meanwhile, can expect continued high energy bills. "California continues to suffer particularly high natural gas prices (more than twice as high as recent national averages)," said the EIA. "Relatively low gas storage levels, low hydroelectric and nuclear power availability, coupled with heavy demand for gas for heating due relatively cold temperatures in the region, has severely strained the gas supply system in that state."

Canada, which typically sees strong seasonal gains in rig counts in December, added more than 50 rigs to the worldwide count. "Canada is helping boost the rig totals as the winter freeze makes it easier to get these rigs up and running," Leak said. The winter freeze makes it much easier to work with rigs, as opposed to the mushy, soft, and sloppy conditions that prevail during the spring thaw.