Banks are among the biggest risers in a buoyant market as cynical dealers mark up Lloyds Banking Group after its job cuts, but BG is also battling it out at the top of the FTSE 100.
The gases giant has doubled its estimate for the oil and gas reserves in Brazil's Santos basin to 6bn barrels with a possible upside of 8bn for the company, making the discovery one of the biggest oil finds in decades. BG has interests in five blocks in the area, with partners Petrobras of Brazil, Spain's Repsol and Portugal's Galp Energia. BG chief executive Frank Chapman said the doubling of the estimates was a significant event:
I believe this - alongside progress with major ventures in Australia, the US and across our global portfolio - will transform the scope, scale and value of BG.
The market seems to agree, with the company's shares jumping 71p to £14.21, a 5% increase. Richard Griffith at Evolution Securities said;
The implication of today's announcement is that on a simple pro rate basis is that our core plus risked valuation for Brazil could rise by around 280p a share. Today's announcement should also add further confidence to the production growth target of 6%-8% per annum to 2020. For now we maintain our target price of £18 a share and buy recommendation until we have reviewed the new data in more detail.Royal Bank of Scotland
Overall the relief rally from yesterday's Greek vote on the government's controversial austerity measures continued, with the FTSE 100 up 37.97 points at 5893.92.
But Petrofac has missed out on the gain, falling 38p to £15.07 despite the oil services company saying it was on track for 15% profit growth in 2011. It also announced finance director Keith Roberts would retire at the end of the year.
Among the mid-caps the London Stock Exchange has jumped 56p to £10.12 on talk it could attract the attentions of a predator now its proposed merger with Canada's TMX has fallen apart.
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