Shares in AWE Limited have soared further after the oil and gas producer emerged as the focus of a likely bidding war between mining services firm Mineral Resources and a Chinese state-owned energy giant.

AWE on Monday said it had received a rival bid from Mineral Resources after the close of trading on Friday.

Under the all-stock proposal, the bidder will issue one Mineral Resources share for every 22.325 AWE shares, valuing the target company at 80 cents a share or $484 million.

That topped a sweetened takeover offer on Friday from China Energy Reserve and Chemical Group (CERCG), offering 73 cents per share, or $463 million, for AWE.

On Monday, AWE said its board was evaluating both offers and asked shareholders to take no action until it provided a recommendation.

By 1415 AEDT, AWE shares were up 16.1 per cent to 84.75 cents each, climbing solidly above the latest proposed offer price.

RBC Capital Markets analyst Ben Wilson said the bids had come at an opportunistic time, with AWE trading at a discount to his valuation of 91 cents a share.

“AWE is currently trading at a premium to the implied Mineral Resources bid, which suggests to us that the market is positioning for either a higher bid from CERCG, an upwardly revised bid from Mineral or a possible third bidder,” he said in a note.

AWE shares have now climbed 55 per cent since the company made public the first, Chinese, bid by the on November 30.

The bidding war is seen as targeting AWE’s main growth asset, the Waitsia gas field in the Perth basin, which the company has touted as the largest onshore gas discovery in Australia in 40 years and capable of supplying around 10 per cent of Western Australia’s domestic market needs.

AWE also has interests in the producing BassGas and Casino projects, off Victoria’s coast, and a 50 per cent stake in the Santos-run Ande Ande Lumut oilfield in Indonesia.

AWE shares had previously sunk after the Chinese company withdrew its initial offer of 71 cents a share earlier last week following the target company’s refusal to open its books for due diligence.

But CERCG made an improved offer directly to AWE shareholders, after complaining that almost two months of discussions between the companies had been unproductive.

Mineral Resources, which offers crushing, processing and other services to the mining industry, in November acquired the assets of Empire Oil and Gas from administrators as part of a strategy to lower its fuel costs in the long term.