PetroMagdalena, a Canadian-based oil and gas firm operating 19 properties in five basins in Colombia, will receive C$1.60 for each of its share.
Pacific Rubiales chief executive officer Ronald Pantin said PetroMagdalena is already a key provider of light oil as diluent for the company’s crude.
"We believe this acquisition is both very complementary and accretive to our existing business," he added.
Canadian Pacific Rubiales plans to finance the acquisition by using existing cash on hand.
PetroMagdalena’s share purchase warrants will also receive 25 Canadian cents in cash for each unexercised warrant held.
Both the firms board of directors have approved the proposed transaction that is expected to close during the third quarter of 2012.
