LONDON Gas producer BG Group BG.L said it had doubled its best estimate of its oil and gas reserves in Brazil's Santos basin to six billion barrels, lifting shares in the company and its partners.
The upgrade of the fields, co-owned with state-controlled Petrobras (PETR4.SA), Spain's Repsol (REP.MC) and Portugal's Galp Energia (GALP.LS), follows new tests and highlights the value of the finds, which represent one of the industry's largest new oil provinces in recent decades.
BG shares traded up 5 percent at 8:40 a.m., against a 0.8 percent rise in the STOXX Europe 600 Oil and Gas index .SXEP. Shares in Repsol were up 2.2 percent while shares in Galp advanced 6.9 percent.
Analysts at Evolution Securities said the news could add 2.80 pounds to its valuation of BG's shares.
"Today's announcement should also add further confidence to the production growth target of 6-8% pa to 2020," the brokerage added in a research note.
BG said its share of recoverable resources from the fields could represent between four and eight billion barrels. It considers six billion the best estimate, up from an earlier estimate of three billion.
Chief Executive Frank Chapman said production capacity would rise steadily to more than 2.3 million barrels of oil equivalent per day by 2017.
"I believe this ... will transform the scope, scale and value of BG Group," he said in a statement.
A spokesman said the economics of developing the reserves were also improving, partly because the per-barrel costs fell with higher reserves estimates.
(Additional reporting by Rosalba O'Brien, Editing by David Hulmes)