The $85 million takeover by Norway-based oil technology and services group AGR will see Upstream continuing to operate under its own identity. But once the transaction is complete, its name will be changed to AGR Upstream Petroleum.

All five shareholders – Cam Rathie, Mark Paton, Duncan Nuttall, Greg Hogan and Rob Thornton – have agreed to remain in senior management positions.

Rathie, who is Upstream managing director, said the deal would see the combined entity become a “substantial player” in the Asia-Pacific region.

“Upstream has been looking for growth opportunities, to increase our service offering and grow our market share in the Australian and Asia-Pacific oil and gas services market,” he said in a statement.

“In deciding to become part of AGR we believe we have found a partner with significant strengths, such as its technology products that will increase the services we can offer our clients, and importantly, with a complementary entrepreneurial and safety-based culture.”

For AGR, the transaction is expected to increase demand for its specialist services and technologies throughout Australasia. These include its unique riserless mud recovery technology, which it claims provides an economic, environmentally friendly solution for drilling top holes in difficult seabed conditions.

Initially, AGR will pay Upstream $A37 million together, as well as $6 million to fund Upstream’s repayment of current net debt. The remaining consideration will be payable in two tranches in the second quarter of 2008 and 2009, subject to Upstream exceeding certain financial targets in 2007 and 2008.

Founded in 1997, Upstream employs more than 400 people and operates in five business area: operations and maintenance, project management, drilling services, consulting services and subsea and downhole equipment.

It currently has operations and maintenance projects both onshore and offshore Australia and India, as well as project management and consultancy contracts across Australia, Malaysia and Papua New Guinea.