Madrid-based oil company Repsol announced Tuesday morning that it has reached a definitive agreement to acquire Calgary-based Talisman Energy Inc. (NYSE: TLM) in an all-cash deal for $8 a share, or $8.3 billion. The price represents a premium of about 56% to Monday’s closing price. Including Talisman’s debt, the transaction is valued at more than $13 billion.

The combined market value of the two companies will be around $32 billion, vaulting Repsol back into the ranks of the 20 largest oil companies in the world. In 2012 Argentina nationalized Repsol-owned YPF, for which Repsol eventually receive $5 billion in compensation. That cash helped finance the deal announced Monday morning.

Perhaps the most intriguing thing about the transaction is the timing. Talisman’s shares have been hit hard by falling crude prices. The share price topped $11 in late June and closed below $4 just last week.

Talisman’s main U.S. assets are located in the Marcellus shale play in Pennsylvania and the Eagle Ford shale play in south Texas. The company also holds stakes in Canadian shale plays and producing properties in the Asia-Pacific region.

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Combined the two companies’ production capacity will be around 680,000 barrels of oil equivalent per day and refining capacity will total about 1 million barrels a day. The combined firm will employ about 27,000 people, only about 2,800 coming from Talisman.

At the end of 2013, Talisman’s proved reserves of oil totaled 114 million barrels. Not including debt, those barrels are costing Repsol about $72 each. Talisman also reported proved reserves of natural gas totaling 4.79 trillion cubic feet and proved reserves of natural gas liquids of 1 billion barrels of oil equivalent. On a per hydrocarbon barrel basis including debt, Repsol is paying about $6.50 a barrel for proved reserves. That appears to be a bargain price for proved reserves, most of which are also developed.

There will be more transactions like this if crude prices remain low well into next year. Talisman’s shareholders are being asked to sell at a bargain price, but the premium to what the oil is worth right now is significant. Expect to see more of these deals.

Talisman’s shares were up more than 50% in premarket trading Tuesday, at $7.71 in a 52-week range of $3.46 to $11.86.

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