Shares in Offshore Hydrocarbon Mapping (OHM) surged by 89% yesterday when the oil and gas exploration technology firm that has suffered trading set-backs said it was in talks with a potential bidder.

Shares in Offshore Hydrocarbon Mapping (OHM) surged by 89% yesterday when the oil and gas exploration technology firm that has suffered trading set-backs said it was in talks with a potential bidder.

Following a movement in the company's share price, Aberdeen-based OHM confirmed it was in early-stage talks that "may or may not lead to an offer being made for the company".

Stressing that there could be no guarantee that any formal offer would be forthcoming, OHM declined to elaborate on a brief statement to investors in which the identity of the suitor was not disclosed.

Speculation is likely to focus on EMGS, the Norwegian rival with which OHM was involved in a lengthy legal battle.

Early last month, OHM said it was on course to make heavy losses this year as overcapacity weighed on the market.

Chief executive Dave Pratt said OHM was battling against frustratingly slow take-up rates for its pioneering technology from the oil and gas sector.

OHM has developed controlled source electro magnetic (CSEM) imaging technology, which cham pions believe can significantly reduce the risk of drilling dry holes.

With adoption rates running well behind the levels hoped for, OHM has been facing a battle to survive against EMGS, which offers rival technology. It abandoned patent infringement proceedings against OHM last year.

Last month Pratt said there had been too much capacity in the market over the last year.

Asked by The Herald whether OHM and EMGS should combine, he said: "Is there a rationale for putting them together? There may be, but I don't think it's been seriously considered by anyone."

Shares in OHM closed up 6.25p at 13.25p giving the firm a market capitalisation of around £3m.

They surged from 170p to 211.5p on the first day's trading on the Alternative Investment Market in March 2004.