Osum had earlier rejected Waterous' original offer to take over the company, calling it inadequate. However, last week, the company's board withdrew its recommendation that shareholders reject Waterous' approach after a sweetened bid.

The deal comes as consolidation heats up in the Canadian oil industry, as operators look to scale up and cut costs to capitalize on a recent recovery in crude prices from the lows touched during the COVID-19 pandemic.

In recent weeks, Canadian oil and gas producer ARC Resources Ltd announced an agreement to buy rival Seven Generations Energy Ltd, while investment firm Brookfield Infrastructure Partners LP launched a hostile takeover bid for oil and gas transportation company Inter Pipeline.

Waterous' latest offer was to buy up to 57 million shares of the oil and gas producer at C$3 per share, implying a deal value of C$171 million ($135.62 million).

($1 = 1.2609 Canadian dollars)

(Reporting by Rithika Krishna in Bengaluru; Editing by Amy Caren Daniel)