Milan-based oil company ENI will buy all the equity and bond debt in troubled Algeria operator First Calgary Petroleums for $923 million, it was announced Monday.

Shareholders in Canada will receive C$3.60 said to represent a 52.5-percent premium on the closing price C$2.36.

Despite finding vast quantities of oil and gas in the Algerian desert and striking up a partnership with Sonatrach to develop the giant MLR oilfield, the company’s stock has been on a steady slide over an extended time, slumping further after a shareholder revolt demanded the chief executive’s ouster.

The ousted chief executive had once warned that backroom interests had sought to destabilize the share price in order to make the company easier to swallow for potential suitors.

The final spike appeared to come with the credit crunch ahead of some $1 billion in financing understood to be needed to hire main contractors for the company’s North African infrastructure-building project.

First Calgary’s financial advisor, JPMorgan Cazenove, called the offer from Eni “fair from a financial point of view”.

However, the deal requires 66-and two-thirds percent of shareholders agree the buy-up. Should shareholders and 75 percent of bondholders agree, the deal will be sealed by “fourth-quarter” 2008.

Eni is set to acquire some 200 barrels of oil equivalent, although most of it is gas.

Tags: Eni Norge AS, First Calgary Petroleums