Italy's Eni SpA has agreed to buy Canada's First Calgary Petroleums Ltd in a cash deal worth €605 million, the latest in a series of acquisitions aimed at boosting its oil reserves worldwide.

"The transaction is in line with our strategy of increasing our presence in our core countries, acquiring high potential assets," Eni chief executive officer Paolo Scaroni said in a statement yesterday.

Eni's stock rose three per cent at €20.85 early in the morning.

Last year, Eni paid €2.1 billion for oil explorer Burren Energy Plc, which produces oil in the Republic of Congo and gas in Turkmenistan. It also bought Maurel & Prom's stakes in fields in the Congo for €972 million.

First Calgary has been developing natural gas properties in Algeria.

Buying First Calgary would boost Eni's reserves by about 190 million barrels of oil equivalent (mmboe) on a 2p basis in the country, it said. 2p means proven plus probable reserves, an estimate of what the company thinks is likely to be recovered over the life of the fields.

Production start-up is expected in 2011 with a plateau of Eni's share of production of about 30,000 barrels of oil equivalent per day (boepd) by 2012, it added.

First Calgary's board has voted unanimously to approve the deal, Eni said, adding it expected to close it later this year.

A group of First Calgary shareholders, directors and officers with about 18.3 per cent of the outstanding shares and options have agreed to vote in favour of the deal, it said.

Last Wednesday, First Calgary said it was in talks with parties interested in buying all of the company or significant parts of its assets.