ERHC Energy Inc (ERHE)

[Southern Man]

TORONTO—Compania Espanola de Petroleos S.A.U. Tuesday said it agreed to acquire Coastal Energy Co. CENJF +27.22% for almost 2.3 billion Canadian dollars ($2.2 billion), expanding the Madrid-based energy company's access to oil and gas reserves in Southeast Asia.

CEPSA is owned by Abu Dhabi state-owned firm International Petroleum Investment Co., which has holdings in oil and gas exploration, shipping, pipelines, petrochemicals and power and utilities in the Middle East, North America, Europe and Asia.

Coastal Energy, which is based in Houston but listed on stock exchanges in Toronto and London, explores for oil and gas mainly in Thailand and Malaysia. In the deal, CEPSA will gain about 149.1 million barrels of oil equivalent of proven and probable reserves, and prospective reserves of more than 500 million barrels of oil equivalent, helping it take advantage of growing energy demand in Asia.

The deal "reflects an important step in increasing CEPSA's E&P capabilities," CEPSA Chief Executive Pedro Miro said in a statement.

CEPSA is paying C$19 a share for Coastal Energy, a 28% premium to its closing price Monday on the Toronto Stock Exchange.