Just days after state-owned China Energy Reserve and Chemicals Group turned hostile in its takeover bid for AWE and its gas rich assets of the Perth Basin, firing back with a US$0.55 cents per share, US$350 million carrot to shareholders who had rejected earlier overtures, a rival second player has raised the stakes in the bidding war.

Perth-based mining company Mineral Resources has come to the table with a scrip-based offer of US$0.60 cent per share, 5 cents higher than CERCG’s US$348 million cash offer. AWE shares leapt 17.5% and closed at US$0.64 cents on the Australian Securities Exchange on Dec. 11.

Mineral Resources’ offer values AWE at US$308 million. The company is seeking a recommendation from the AWE board for its offer whereby AWE shareholders would receive one Mineral Resources share for every 22.325 shares held in AWE.

AWE said in a note to shareholders that it would review and offer and advise “in due course.”

This came after the board of the Sydney-headquartered oil and gas company had refused a final due diligence review requested by the Chinese company, who had abandoned an earlier offer of US$0.51 cents per share.

CERCG bounced back Dec. 8, however, asserting that its analysis of the Waitsia gas project in the Perth Basin—Australia’s largest onshore gas discovery for the last 40 years, which is 50% AWE-owned—now estimated that it contained reserves of at least 500 petajoules.

AWE immediately released a statement advising shareholders to “take no action” in response to the offer. The company said it would seek a recommendation from its board.

CERCG is reportedly interested in information relating to supply Waitsia-related contracts, production licenses and stage two development of the project.

CERCG managing director Liping Xuan commented in a statement: “We are pleased to make this offer directly to AWE shareholders, which provides them with the opportunity to lock in certain all-cash value at an attractive price, while removing the significant operational and market risks associated with AWE.

“And we are pleased that AWE shareholders, who are the ultimate decision makers, will have an opportunity to realise compelling value for their shares.”

CERCG has denied that it would ship Perth Basin gas to China and suggested it is interested in taking advantage of gas supply shortfalls in the eastern states of Australia by deploying special ships to meet demand in the states of Victoria and New South Wales.

The hostile takeover bid surfaced barely two weeks after AWE achieved one of the highest onshore flow rates in the history of the Australian oil and gas industry. The Waitsia-4 well delivered gas at an instantaneous maximum rate of 90 million standard cubic feet per day from the Kingia Sandstone. It also yielded an average of 89.6 MMscf/d on a 96/64-in. choke at about 2,395 psig flowing well head pressure over a 23-minute period.