AWE sinks after Chinese withdraw $430m bid

AWE says China Energy Reserve and Chemical Group has formally withdrawn its takeover proposal, which had valued the ASX-listed securities at 71 cents per share.

AWE shares have sunk after a Chinese state-owned energy corporation withdrew its $430 million bid for the Australian oil and gas group.

The news comes less than a week after AWE notified the ASX that its board was considering China Energy Reserve and Chemical Group's 71 cents a share offer, which drove its shares more than 20 per cent higher.

AWE had indicated at the time that the Chinese bid was not high enough to give the bidder access to its books under due diligence.

On Tuesday, the company said China Energy Reserve and Chemical Group had formally withdrawn the unsolicited indicative proposal, but did not disclose any reasons for the move.

AWE shares dropped seven cents, or 10 per cent, to 63 cents.

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

However, its main growth asset is seen as 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.