Rift Oil, which is drilling for gas in Papua New Guinea, was one of the most heavily traded shares on the London market, with 21 million changing hands after the company said that it had been successful beyond its “most optimistic expectations” at its second well.

Ian Gowrie-Smith, Rift’s founding chairman, said it had found about twice the volume of gas as in its first well, and 50 per cent more than expected. At first Rift rose 1.38p as traders gave it a collective round of applause, but it closed flat at 9.875p as speculative buyers sold out, having doubled their money in a few months. Mr Gowrie-Smith, the founder of SkyePharma, said that it was now very likely that the two holes, with seven other structures yet to be drilled in the licence area, would contain enough gas to satisfy Alcan, which has agreed to fund the building of a pipeline from Papua New Guinea to Australia to supply its aluminium plant there if Rift can prove 800 billion cubic feet of gas, enough to last it 20 years. An upgraded resource estimate should come after tests in a few weeks.

Regent Inns rose 0.66p to 3.54p after Luminar, down 2p at 223p, confirmed a report in The Times that it was trying to merge 3D Entertainment, its 49 per cent-owned bar group, with Regent but had no “current intention” of making an offer for the company. Renwick Haddow, a former financial controller of Regent, who has built a 3 per cent stake in the company, is asking management for a boardroom seat. He believes that he can turn around Regent’s Walkabout chain.

Ithaca Energy gained ½p to 122½p after a well at its Athena prospect in the North Sea showed more oil than expected. Rheochem, down ¼p at 13p, has a 5 per cent stake in Athena.

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