Test drilling of Enterprise Oil's gas discovery off the west coast has "indicated the highest levels of gas ever recorded" in a find in Irish waters, the Department of the Marine and Natural Resources has said.

The discovery, located in the Slyne Trough about 34 miles off Achill Island, tested at a rate of 63 million standard cubic feet of gas per day, which is considered high in the industry. For example, the peak flow from the State's largest gas find at Kinsale was 60 million standard cubic feet.

In response to the latest announcement, Enterprise Oil's share price in London increase by 24.5p or 6 per cent, to close at 411p.

However, a final appraisal test is still needed to assess the volumes of gas at the discovery. If gas at the same level is found in large volumes during that test, the discovery would be able to supply all of the Republic's current gas needs for a period of years, according to the British company. There might also be enough left over to export through the gas interconnector with Britain, it added.

A spokesman for the Department said that, while it was too early to confirm the final levels in the discovery, "it has the potential to be one of the biggest finds ever".

Because of the hazardous conditions at the discovery, which is situated within block 18/20, the final stage of test drilling will not be undertaken until next summer.

It may be five years before gas is brought ashore, as a pipeline would have to be built to land. This will cost millions and is unlikely to be financed by the company. With Kinsale set to run out in 2015, the Government is currently looking for alternative supplies of gas. The Minister for the Marine and Natural Resources, Dr Woods, said "the challenge now is to reduce reliance on imported energy by developing further Irish hydrocarbon production".

Enterprise Oil has 21 blocks in the Corrib area and says the latest test results mean other blocks may contain commercial reserves, although most of them have not been subject to the same amount of drilling.

The company, which is quoted in London, was awarded an exploration licence for the block in 1994 and found this discovery in 1996. Due to mechanical problems, the testing of the well was delayed for almost a year. Enterprise Oil has spent £40 million testing the discovery so far.

Enterprise Oil has a 45 per cent share in the 18/20 block, Saga Petroleum UK has 40 per cent and Statoil Exploration Ireland has a 15 per cent stake.

The general manager of Enterprise Oil, Ireland, Mr John McGoldrick, said the company was very happy with the flow rates from the discovery. "We know there is good quality gas down there and it is flowing at high rates, but we still want to know how much is down there," he said.

The final appraisal test will be conducted at the edge of the gas reserve which is present within a sandstone block. In the unlikely event that the test does not provide enough information, another test drill will be undertaken.