UPDATE 4-Anadarko ups Mozambique gas reserves again

Mon Nov 28, 2011 9:55am EST

* Could be one of biggest gas finds in a decade

* Reserves could be three times last estimate

* Cove shares rise, could attract bids

* Anadarko shares up 6 pct

By Tom Bergin

LONDON, Nov 28 (Reuters) - U.S. oil company Anadarko Petroleum Corp said its major gas finds offshore Mozambique were around twice as large as it earlier thought, adding support to hopes that East Africa will become another major gas production centre.

Anadarko said on Monday that the results of its Barquentine-3 appraisal well showed its fields had recoverable reserves of 15 to over 30 trillion cubic feet (Tcf) of natural gas -- compared to total UK gas reserves of 9 Tcf, according to the BP Statistical Review of World Energy.

"This could be one of the most important natural gas fields discovered in the last 10 years," said Anadarko Chairman Jim Hackett.

Previously, Anadarko said the fields, in which Japan's Mitsui & Co Ltd and Dublin-based Cove Energy Plc have stakes, held "at least 10 Tcf" of gas.

Cove shares traded up 10 percent at 87.25 pence, outperforming a 1.9 percent rise in the STOXX Europe 600 Oil and Gas index . Shares of Andarko climbed 6 percent in early New York Stock Exchange Trading to $76.50.

Analysts at Peel Hunt said they had upgraded their target price for Cove shares to 166 pence from 126 pence.

Anadarko said the results supported its plans to build a liquefied natural gas (LNG) export facility in Mozambique.

Analysts said the latest drilling success should also make investors more confident that other prospects might find gas.

"Today's announcement also significantly de-risks a further 15 prospects and leads identified on the licence," Richard Griffith at Evolution Securities said.

Explorers see Anadarko's finds as evidence of a trend of oil and gas fields extending along the East Coast of Africa -- a region not seen in previous decades as having good exploration prospects.

Last month, Italian oil group Eni said it had made a giant natural gas discovery -- the biggest in its history -- offshore northern Mozambique, close to the Anadarko fields.

Hopes of other major finds have drawn a rash of other companies to the area including Britain's BG Group Plc , Portugal's Galp, Norway's Statoil ASA and Texas-based Exxon Mobil Corp .

Cove Energy is seen as a possible bid target or at least a willing seller of its Mozambique assets since it is largely a financial investor.

However, until recently, the company's assets were seen as too early in the exploration stage to be attractive to Asian state-backed companies which are acquisition hungry but which prefer to buy companies or field stakes with known reserves.