At the moment there seems to be nothing but positive news for BG from the Santos Basin in Brazil, where the gases group owns a 25% share.
Today is no exception, as BG announced record productivity from tests on the Iracema appraisal well at the basin. Chief executive Frank Chapman said:
This provides further evidence of the very large areal extent and prolific nature of the pre-salt discoveries we have made. We will be working closely with our partners to consider the optimum development sequence following this outstanding result.
In a buy note on the business, Alan Sinclair at Seymour Pierce said:
These very high productivity rates mean that fewer development wells will be required on the field and, given that well costs account for over half anticipated capital costs on the field, this will have significant positive implications for project economics. The Santos Basin continues as an excellent source of positive news flow for BG and we reiterate our buy stance.
BG has added 7.5p to £11.45. Meanwhile British Gas owner Centrica, once part of BG of course, is up another 3.3p at 260p following yesterday's spate of talk suggesting interest from Russia's Gazprom.
