Sept. 19 (Bloomberg) -- Norsk Hydro ASA, Norway's second- largest oil company, agreed to buy Spinnaker Exploration Co. for $2.45 billion to gain fields in the U.S. Gulf of Mexico as production from North Sea fields declines.

Norsk Hydro will pay $2.45 billion in cash, or $65.50 a share, and assume $110 million in debt, the Oslo-based company said in a statement to the Oslo exchange today. The price is 34 percent higher than Spinnaker's closing price last week.

Hydro and its larger Norwegian rival Statoil ASA are looking abroad and to the Arctic for new energy reserves as output in the North Sea drops after more than 30 years of production. In April, Statoil agreed to buy deep-water assets in the Gulf of Mexico from Canada's EnCana Corp. for $2 billion.

Takeovers in the oil and gas industry are increasing as soaring prices lead to record profits and new fields become more difficult to find. The acquisition will increase Hydro's expected average annual international production growth from 2005 to 2008 to 40 percent, the company said. Spinnaker's output is planned to more than double to 50,000 barrels of oil equivalents daily by 2008 from 23,000 barrels now.

Hydro, which gets almost 90 percent of its oil and gas at home, pumped 539,000 barrels of oil and gas daily in the second quarter, down from 569,000 barrels a day a year earlier.

The company's proven reserves at the end of 2004 were 2.076 billion barrels of oil equivalents, down from 2.288 billion barrels the year before.

Spinnaker has reserves of 129 million barrels of oil equivalents and holds exploration rights in the Gulf of Mexico and Nigeria, Hydro said. The U.S. company in June announced a gas discovery at the Q prospect in the Gulf of Mexico. Spinnaker, which has a 50 percent stake in the prospect and is operator, called the discovery ``significant'' to its reserves.

Hydro, which has operations in Angola, Russia and Iran, is developing its first Gulf of Mexico project at the Telemark discovery, which it acquired a 57.5 percent stake in last year. The company is also the world's fourth-largest aluminum producer.

The acquisition is set to be completed in the fourth quarter of this year, Hydro said.

To contact the reporters on this story: Beate Evensen in Oslo at bschjolberg@bloomberg.net; Bunny Nooryani in Oslo at bnooryani@bloomberg.net

Last Updated: September 19, 2005 03:05 EDT