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Petrohawk Energy Corp. (HK) said Tuesday that first-quarter production rose 14% from the previous quarter and 58% from a year earlier.

The Houston natural-gas and oil company said first-quarter output averaged 412 million cubic feet of gas equivalent a day. Petrohawk also stuck by its forecast for a 40% rise in production this year over last, adding it expects second-quarter output to average between 420 million and 430 million cubic feet of gas equivalent a day.

The company, which specializes in drilling for gas in tight, shale-rock formations such as the Haynesville Shale in Texas and Louisiana, the Fayetteville Shale in Arkansas and the Eagle Ford Shale in South Texas, also stuck by its $1 billion capital budget for the year. Last October, Petrohawk cut its 2009 capital budget by a third to $1 billion, joining several other big gas producers like Chesapeake Energy Corp. (CHK) in reining back spending as gas prices plunged and credit markets dried up.

Gas for May delivery traded on the New York Mercantile Exchange was recently down 6.8 cents, or 1.9%, at $3.472 a million British thermal units, close to a six-and-a-half-year low. Gas futures prices have dropped by nearly three-fourths since July, as industrial demand has crumbled amid the recession, just as a flood of new U.S. supplies - especially from shale formations - entered the market.

Petrohawk said in a press release that measurements taken from wells drilled in part of the Eagle Ford Shale indicate "this particular area is one of the highest quality shale reservoirs discovered to date in the United States." The company raised its ultimate recovery assumption for wells in the play to a midpoint of 5.5 billion cubic feet of gas equivalent per well.

Shares of Petrohawk were recently down 51 cents, or 2.5%, at $19.85 apiece.

-Mark Long, Dow Jones Newswires; (201) 938-4427; mark.long@dowjones.com