Norwegian oil firm DNO International said it would buy oil and gas fields from UAE-based RAK Petroleum for $250 million of DNO stock, after pricing its shares towards the upper end of a previously announced range.

The company also said it would next year seek a long-awaited secondary listing on the London stock exchange.

DNO, which agreed in July to buy the RAK assets in return for DNO shares, said then that new shares would be issued in a price range of 8.25 to 10 crowns against RAK assets valued at $250 million to $300 million.

"The transaction values DNO International at $1.64 billion corresponding to NOK 9.50 per share and RAK Petroleum's operating subsidiaries at $250 million (before working capital adjustments)," the company said on Monday.

DNO is valued at $1.64 billion in an all-share acquisition of oil and gas fields from its main shareholder under the agreement, some two-thirds over its market value.

Shares in DNO rose 4 percent to 5.67 crowns by 1114 GMT on Monday.

The oil firm, which has a 1.77 billion Norwegian crowns ($327 million) cash pile to invest with, is seeking to grow and diversify and is on the lookout to buy oilfields in the Middle East.

The boards of the companies have approved the transaction but it has yet to be voted by an extraordinary general meeting of DNO, due around December. Once it is done, DNO will seek to get listed on the LSE.

"There is a lot of preparation work to be done ... Realistically it will be towards the middle of next year," DNO's chief executive Helge Eide told Reuters.

Oil prices have fallen some 16 percent since early April, with a barrel of Brent crude worth $111 at 1105 GMT. Eide said DNO had no plans to hedge the oil price despite the uncertainty about the prospects of the world economy.

"The very clear advice from our owners is that we will not do that," said Eide. "The reason for them to invest in an oil company is also about taking a bet on the oil price."

DNO produced an average of 45,000 barrels of oil equivalent per day (boed) as of July, with RAK Petroleum adding an extra 7,500 boed as soon as the transaction is completed, climbing to around 15,000 boed within a year.

After the transaction, DNO's prized possession will remain its massive Tawke oilfield in Iraqi Kurdistan, expected to produce some 53,000 boed in August, but which has the capacity to produce twice as much.-Reuters