David Lesar, chief executive of Halliburton Co. (HAL), said the high levels of natural gas storage would keep North American gas drilling activity suppressed in 2009.

"Any recover in gas drilling is likely to be relatively modest for the rest of 2009," Lesar said during a call todiscuss the company's second-quarter earnings.

Natural gas storage levels have swelled despite the brisk pullback in drilling activity. Natural gas in U.S. storage for the week ended July 10 stood at 2.886 trillion cubic feet - 26% higher than a year ago and 19% higher than the five-year average.

Meanwhile, the U.S. gas drilling rig count has plunged, falling by more than half from its peak of 1,606 rigs in September.

-By Jason Womack, Dow Jones Newswires; 713-547-9201; jason.womack@dowjones.com