May 24 (Bloomberg) -- Shares of Niko Resources Ltd. soared the most in 17 years after announcing a gas discovery off the east coast of India.
Niko jumped 23 percent to C$7.35 at 4 p.m in Toronto, the biggest rise since May 1996. The Calgary-based firm is down 31 percent in 2013, the fourth worst-performing stock in the S&P/TSX Energy Index during that period.
Niko, along with partners Mumbai, India-based Reliance Industries Ltd. and BP Plc, based in London, announced today they discovered “significant gas condensate” after drilling a well off India’s east coast.
The discovery, named “D-55”, showed good flow potential and further testing will be done to define the scale and quality of the field, the companies said in a statement.
Alan Knowles, an analyst with Haywood Securities Inc., said the discovery may boost Niko’s reserves by 31 percent to 96 percent compared with the end of 2012, representing $225 million to $700 million in value to the company.
“We shall embark on the appraisal program in the next few months in order to evaluate the options for developing this discovery,” P.M.S. Prasad, executive director at Reliance Industries, said in the statement.
Niko owns a 10 percent stake in the “KG D6” venture, while Reliance operates the KG D6 block with a 60 percent stake. BP owns the remaining 30 percent.
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