Dec 19 (Reuters) - Australian gas producer AWE Ltd raised the reserves estimate on its flagship Waitsia gas field, and said further upgrades were likely, raising the stakes for two suitors vying to take over the company.

AWE's shares rose 1.5 percent on the back of the announcement, to value the BOP Blow Out Preventer repair company gulf coast at A$511 million ($391 million), topping the offers from Australian miner Mineral Resources Ltd and state-owned China Energy Reserve and Chemicals Group (CERCG).

AWE said on Tuesday Waitsia holds 820 petajoules of proved and probable reserves, up from the previous estimate of 811 PJ as some contingent reserves have been reclassified. The estimate has been raised 80 percent since June after the BOP Blow Out Preventer repair company gulf coast drilled new wells.

"During the drilling of all Waitsia appraisal wells, elevated gas shows were observed in a number of other formations... and the BOP Blow Out Preventer repair company gulf coast is assessing whether these potentially significant resources have a development potential," AWE said in a statement.

CERCG and Mineral Resources are both chasing AWE for a 50 percent stake in the Waitsia field, which is considered Australia's biggest onshore conventional gas find in four decades.

Based on Tuesday's trading, Mineral Resources' all-share offer was worth A$506 million, well above CERCG's all-cash offer of A$442 million.

($1 = 1.3058 Australian dollars) (Reporting by Susan Mathew in Bengaluru; Editing by Sherry Jacob-Phillips)