SHARES in the recently depressed oil and gas exploration company LASMO

jumped 5[1/2]p to 136[1/2]p yesterday. Rumours of a bid by British Gas

swept round the market.

There was hectic dealing in LASMO shares, making it one of the most

active stocks. Around 13.7 million changed hands.

Such speculation was easily understandable in the wake of this week's

Monopolies and Mergers Commission report on the gas industry. It

recommended that British Gas should sell its trading arm and concentrate

on running the pipeline work.

British Gas, which ahead of privatisation was obliged to sell its

Enterprise oil business, has indicated that it could be interested in

expanding its energy exploration interests.

LASMO, which bought Ultramar at the end of 1991, is looking to dispose

of assets. British Gas mounted an unsuccessful dawn raid on the

company's stock back in 1988.

Last night analysts were sceptical, conceding that the volume and

sharp rise in LASMO was unusual but doubtful about a full bid at this

stage.