Talisman Energy Inc., Calgary, (NYSE, Toronto: TLM) plans to acquire London-based Rift Oil Plc (London AIM: RIFT), with assets in Papua New Guinea, for approximately £108 million (US$177 million) in cash.

Talisman will pay 13 pence per Rift share, a 39% premium over a 30-day trading period, and a 72% premium over a three-month period.

Rift holds 100% interest in production licenses 235 and 261 onshore in the Foreland Basin in Papua New Guinea.

The deal is contingent upon an extension of the license to PPL 235, which expires in August, and the termination of a farm-out agreement entered in early May.

Talisman executive vice president, international operations (East) Paul Blakeley says, “The acquisition will provide a low-cost opportunity to aggregate gas in Southeast Asia, one of the growth areas in our portfolio.”

Rift Oil nonexecutive chairman Ian Gowrie-Smith says, “It is time for those with more significant resources to take over the challenge of development and commercialization.”

Tristone Capital is advisor to Talisman. RBC Capital Markets is advisor to Rift.

Talisman Energy main operating areas are North America, the North Sea and Southeast Asia.