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Niko shares rise on reports of gas discovery in India

A worker examines the valve of a pump on a well near the western Indian city of Ahmedabad in a file photo.

AMIT DAVE/REUTERS

Shares of oil and natural gas producer Niko Resources Ltd. rose 14 per cent on Tuesday following media reports that its partner Reliance Industries Ltd. has made a significant gas discovery in the KG-D6 block on India's east coast.

Reliance found natural gas in the first exploration well it has begun in more than five years in the flagging natural gas fields in the block, Indian media reported.

Niko has a 10-per-cent stake in the D6 block, while Reliance holds 60 per cent and BP PLC the rest.

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"The confirmation of a discovery would be welcome news for Niko, which has struggled over the past year with declining production in India and a string of disappointing exploration results offshore Indonesia," Macquarie Equities Research analyst David Popowich wrote in a client note.

"Nonetheless it remains early days and we continue to wait for confirmation of the results from the operator," Mr. Popowich said.

The company, which also has operations in Bangladesh, Indonesia, Trinidad, Madagascar and Pakistan, said last month it was in advanced talks to sell some non-core assets for $157-million.

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