Eni (E) - Get Report  shares surged more than 3% in the first hour of trading Monday after it announced a deal to sell a stake in its Egyptian gas field Zohr to Rosneft.

The deal comes on a day when oil prices have soared as more oil producers agreed to cut output. West Texas Intermediate was up 5.73% to $54.45 and Brent Crude was up 5.32% to $57.22 a barrel after Saudi Arabia signaled it was ready to cut oil production more than expected. Russia and other non-OPEC countries agreed to curb output next year.

Eni's shares gained 3.65% to €14.76 each in Milan, taking the full-year advance to 6.67%.

The Italian oil and gas company agreed to sell 30% of its Shourouk Concession in Egypt to Russian government owned Rosneft for $1.125 billion. The deal also provides for the reimbursement of $450 million in past expenditures.

Under the deal, Rosneft has also an option to buy a 5% stake under the same terms. The deal is subject to "fulfilment of certain standard conditions, including all necessary authorizations from Egypt's authorities," Eni said.

"This agreement further confirms the success of Eni's "dual exploration model" which, in parallel with an accelerated development of the hydrocarbons reserves, aims at early monetization of the value through the dilution of the high participating interest owned in huge exploration discoveries," Eni added.

The Italian company sold 10% of the Zohr to BP (BP) - Get Report in late November for $375 million and $150 million pro-quota reimbursement for past expenditures. BP has an option to buy a further 5% stake under the same terms. BP shares gained 2.25% to trade at 486.4 pence each by 08:50 GMT in London.

The Zohr field was discovered in August 2015 by Eni and is the largest natural gas field ever found in the Mediterranean, with a total potential of 850 billion cubic meters of gas in place. The first gas is expected by the end of 2017.