Australia’s second-largest independent gas producer Santos has agreed to extend the exclusivity period for a $18.7 billion takeover bid from a consortium led by Abu Dhabi National Oil Company (ADNOC), according to Reuters. The due diligence deadline has also been pushed for a month to September 19, giving ADNOC’s investment arm XRG and its partners more time to finalize a binding proposal.

The delay resulting from the extension caused a 3.5% decline in Santos’ shares recording to a more than five-week low of A$7.68 as investors questioned whether this delay could kill the deal.

Meanwhile, Santos CEO Kevin Gallagher said progress with XRG had been positive and noted that the consortium had found no issues in due diligence that might derail the deal.

The exclusivity period, which ended last Friday, prevents Santos from negotiating with other bidders offering the same price, though higher offers can still be considered. The proposal also requires regulatory clearance in Australia, Papua New Guinea, and the US.

Santos reported underlying earnings of $508 million, down from $654 million a year earlier due to weaker LNG and oil prices, but still 3% above analyst forecasts.

Aiming to diversify its LNG market, ADNOC’s investment arm XRG with Abu Dhabi Development Holding Company (ADQ) and private equity firm Carlyle proposed in June to offer $5.76 (A$8.89) per Santos share.

Taking into account net debt, the deal gives Santos an enterprise value of A$36.4 billion, which would make it the largest all-cash corporate buyout in Australian history, according to FactSet data.

From this deal, the XRG-led consortium would gain control of two Australian liquefied natural gas operations; Gladstone LNG and Darwin LNG, as well as stakes in PNG LNG and the undeveloped Papua LNG. Santos’ interests in Papua New Guinea are considered its most prized assets.

Santos is currently expecting to begin oil production from its Pikka project in Alaska in the first quarter of 2026 instead of the first half.