UK-based Cairn Energy has announced its plans to acquire Norwegian oil company Agora Oil & Gas for $450m.

The deal is subject to approval from regulatory authorities in the UK and Norway; it will be made through a combination of 43% cash and 57% Cairn shares.

Cairn Energy chief executive Simon Thomson said it was the first step in establishing balance in the Cairn portfolio.

"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," he said.

Agora will add drilling activity to Cairn’s 2012 exploration and appraisal programme with nine wells, eight of which are firm and one is contingent; they are scheduled to be drilled later on this year.

The proposed acquisition includes Agora’s 15% stake in the Catcher area planned for development and a 20% interest in the Tybalt discovery.

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By GlobalData