News: AWE nearly doubles reserve estimate at Australian Waitsia gas field

MELBOURNE, June 3 (Reuters) - Australian takeover target AWE Ltd (AWE) nearly doubled its estimate of recoverable gas for one of its key growth assets, the Waitsia field in Western Australia, sending its shares up to a nine-month high on Friday.

The increase vindicates AWE's rejection of a A$421 million ($305 million) takeover approach from U.S. private equity fund Lone Star in May. It also boosts the potential value for AWE's partner Origin Energy (ORG), which is seeking bids for its Perth Basin assets, including a 50 percent stake in the Waitsia field.

AWE said in a statement that drilling data from 2015 showed the field holds recoverable reserves of 344 billion cubic feet of gas, up 93 percent from an earlier estimate of 178 billion cubic feet.

"This significant reserves upgrade is another very successful step in the ongoing appraisal of the Waitsia gas field and underlines the strategic importance of this exciting onshore gas project," AWE Managing Director David Biggs said.

AWE's shares rose nearly 7 percent on Friday to A$0.91, their highest since September and well above Lone Star's proposed offer of A$0.80 a share.

Modelling shows the Waitsia field could produce 100 terajoules a day (95 million cubic feet a day), said Biggs. He said AWE expects to start delivering 10 TJ/day of gas into the domestic market in the September quarter. ($1 = 1.3822 Australian dollars)