Niko Resources discovers huge gas in India block; shares soar

Fri May 24, 2013 11:56am EDT
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May 24 (Reuters) - Canadian oil and natural gas producer Niko Resources Ltd said on Friday it made a significant gas discovery, along with its partners, in the KG-D6 block off India's east coast, sending its shares up 26 percent.

Niko, which partners India's Reliance Industries Ltd and BP Plc, said the discovery is expected to add to the gas resources in the block, without revealing potential reserves.

"Formation evaluation indicates a gross gas and condensate column in the well of about 155 meters in the Mesozoic reservoirs," the companies said in a statement.

The discovery, named D-55, comes at a time when the companies had been grappling with declining output at the block.

"We shall embark on the appraisal program in the next few months in order to evaluate the options for developing this discovery," PMS Prasad, executive director at Reliance Industries, said in a statement.

A Reliance Industries spokesman declined to give further details when contacted by Reuters.

Reliance is the operator of the block with a 60 percent stake. BP holds 30 percent and Niko the rest.

Niko shares were up 21 percent at $7.26 at midday. They rose to a high of C$7.54 early on the Toronto Stock Exchange on Friday. (Reporting by Bhaswati Mukhopadhyay in Bangalore and Prashant Mehra in Mumbai; Editing by Sriraj Kalluvila)