Metgasco Ltd., holder of the largest certified natural gas reserves in Australia's New South Wales state, said drilling has increased its proven and probable reserves by 21 percent.

Gas in the so-called 2P category of reserves have increased to 298 petajoules (281 billion cubic feet), the Sydney-based company said today in a statement to the Australian stock exchange, citing an independent assessment by MHA Petroleum Consultants. The shares rose the most in more than seven weeks.

Metgasco has initial accords to supply gas to Queensland power generator CS Energy and the Australian unit of BP Plc. Interest in coal-seam gas reserves is rising after investments this year in ventures in Queensland state by BG Group Plc, Royal Dutch Shell Plc and Petroliam Nasional Bhd.

``We expect a series of further reserves upgrades over the next six months as we continue to build to our previously stated 2P target of 640 petajoules,'' Managing Director David Johnson said in the statement.

Metgasco gained as much as 10.5 Australian cents, or 13 percent, to 91 cents in Sydney trading and was at 86 cents at 11:12 a.m. local time.