Niko says proved reserves rise 160%

Says that recent gas discovery in D6 block off India's east coast could add significantly to future reserves

Canadian oil and natural gas producer Niko Resources Ltd said its proved reserves increased by 160%, and that a recent gas discovery in the D6 block off India's east coast could add significantly to future reserves.

Niko shares rose as much as 13% in morning trading on the Toronto Stock Exchange on Thursday.

"These discoveries (proved reserves) are undeveloped and not expected to come on production until 2015 to 2017. Nevertheless, it is positive as it highlights Niko's portfolio, developing assets over the next few years," Macquarie Equities Research analyst David Popowich told Reuters.

Niko said in May it made a significant gas discovery, along with its partners, in the KG-D6 block off India's east coast.

 

Reliance Industries Ltd is the operator of the block with a 60% stake. BP Plc holds 30% and Niko the rest.

Niko said it received the final draft of the reserve evaluations for the D6 and NEC-25 blocks in India and a block each in Trinidad and Tobago and Bangladesh.

Niko, which also operates in Pakistan, Madagascar and the Kurdistan region of Iraq, said total company reserve rose to about 550 billion of cubic feet equivalent of total proved reserves.

The company said the MJ-1 gas discovery in the D6 block was not reflected in these reserves.

Niko shares, which have risen about 39% since the company announced the gas discovery in India on May 24, were up 8% at C$8.25 in late-morning trading. They touched a high of C$8.58.