British oil explorer Cairn Energy has agreed a deal to buy Agora Oil & Gas for $450m (£280.7m) to increase its drilling activity in Britain and Norway in 2012 and expand its lower risk, near-term exploration assets.
Cairn said it would pay for the deal through a combination of approximately 43 per cent cash and 57 percent Cairn shares, subject to regulatory approval.
Cairn said it would pay a total consideration of $450m when including the net working capital of $75m. It put the enterprise value of the proposed acquisition at $375m, including $58m of potential tax shelter in Britain and Norway.
"This is an important first step in establishing balance in the Cairn portfolio," chief executive Simon Thomson said. "This acquisition secures a building block in areas where we see the opportunity to build cash flow from near term, lower risk exploration, development or producing properties.
"Agora possesses attractive core assets and significant exploration potential both in 2012 and beyond in an area offering future organic growth."
City A.M. Reporter