* Shares soar 18 percent on bid rumour
* No bid talks - sources
* Follows flurry of deal talks
By Tom Bergin and Dominic Lau
LONDON, June 18 (Reuters) - Shares in Dana Petroleum surged 18 percent on Thursday on rumours of a $2.7 billion bid but sources familiar with the oil & gas explorer's thinking said the company was not in takeover talks.
Dana shares hit 1,470 pence as dealers cited talk of a bid.
"Hearing a vague rumour of 1,800 pence (per share) bid for Dana Petroleum," a trader said.
Dana Petroleum declined to comment on the bid talk, which was also reported on the FT Alphaville blog.
Two sources familiar with Dana's thinking rubbished the rumour.
"Its a pure market rumour," said one source. "There's nothing to it".
Another source who also denied bid talks said the rumour may have been prompted by the recent flurry of deals and deal talks among British-listed oil and gas explorers.
Heritage Oil, Dragon Oil and Addax Petroleum all said in recent weeks that they had received bid or merger approaches.
Rift Oil agreed on Wednesday to a 114.8 million pounds ($188.2 million) acquisition from Canada's Talisman Energy.
Bankers say the recent rise in oil prices to over $70/barrel from around $50 two months ago and around $35/barrel toward the end of last year, had prompted companies to move on targets before the crude rise pushes asset prices higher.
Dana has long been the subject of frequent takeover rumours. ($1=.6098 pounds) (Additional reporting by Jon Hopkins; editing by Mike Nesbit)