Malaysia’s largest oil and gas services company Sapura Energy Bhd on Sept. 12 said it would sell a 50% stake in its upstream business to Austria’s OMV.

The proposed deal is based on an enterprise value of $1.6 billion, Sapura said, adding the companies have agreed to continue talks on an exclusive basis.

Sapura shares rose as much as 4.5% after the announcement, which comes weeks after the firm said it was planning to raise 4 billion ringgit (US$963.86 million) through a proposed rights issue, in a bid to boost its financial position and pare down debt.

“We have explored all options including the potential listing of our upstream business,” Sapura CEO said in a statement. “The invitation to enter into this strategic partnership with a leading oil and gas player serves our goals and aspirations better while providing certainty in timing and valuation.”

Sapura has a market capitalization of about $484.5 million, while OMV has a valuation of about $16.9 billion, Thomson Reuters data shows.

Last week, OMV’s head of E&P, Johann Pleininger, told Reuters in an interview it had plans to expand its exploration business with an acquisition in Southeast Asia by the end of 2018.

Earlier this year, the Austrian firm expanded its operations in New Zealand and the United Arab Emirates, to balance geopolitical risks it faces in its operations in countries like Russia, Libya and Yemen.

OMV has set aside 10 billion euros (US$11.59 billion) for acquisitions until 2025.

Sapura’s Shahril said the strategic partnership with OMV will complement their continued strategy “to grow our portfolio and expand our acreage position.”

“The partnership will sharpen Sapura Energy’s competitive advantage by leveraging on the strength of its portfolio of commercially viable gas fields offshore Sarawak and its acreage in new markets in New Zealand, Gulf of Mexico and most recently, Australia,” Shahril said.

Sapura reported a loss in the quarter ended April, its third consecutive quarterly loss.