Oil Search remains open to takeover offers after rejecting an $11.6 billion overture from Woodside, but analysts doubt the Papua New Guinea-focused energy producer is in any rush to strike a deal.
Oil Search on Monday said its board had unanimously rejected Woodside's all-scrip bid, saying it grossly undervalued the company.
"We will certainly go with any party that presents a compelling value for Oil Search shareholders. But it was clear that Woodside's proposal fell short of that test," chairman Rick Lee told analysts.
Woodside last week offered one share for every four shares held in Oil Search, implying a premium of around 14 per cent based on the companies' closing prices last Monday, the day before the offer.
GMP Securities oil & gas analyst Scott Simpson says it is unlikely that Oil Search would be interested in any revised offer from Woodside at this time.
"If there ever was to be a transaction in Oil Search, we would expect to see that near the top of the cycle, not at the bottom-end," he told AAP.
"It was opportunistic from Woodside. Oil Search doesn't need to transact at this time."
Global crude oil prices have fallen over the past year to below $US50 a barrel, as rising supplies and lacklustre demand have prompted a steep decline since mid-2014, when crude fetched more than $US100 a barrel.
The decline has battered energy company shares: both Woodside and Oil Search have seen their share prices fall around 30 per cent each during the past 12 months.
Oil Search shares dipped in early trade on Monday but closed four cents higher at $7.48. They gained nearly 10 per cent last week since the bid.
Woodside shares also recovered from early falls and closed steady at $28.41.
Mr Lee said Oil Search, along with its operators ExxonMobil and Total, had access to competitively priced project finance for its LNG developments and substantial corporate debt capacity.
"Oil Search is in a very strong position, both operationally and financially, with clear growth opportunities," he said.
The company had lifted sales volumes to help offset lower oil prices in the six months to June - its most recently reported results - boosting net profit 49 per cent, in stark contrast to many of its peers.
Its PNG LNG project has also performed ahead of expectations. Oil Search also holds stakes in the Elk and Antelope gas fields in the country.
Woodside said it was surprised and disappointed that Oil Search's board had rejected the proposal without meeting with the company to understand the benefits or to negotiate the terms.
The company declined to comment on whether it would be back with an improved offer but, in a statement, said it would continue to maintain a disciplined approach in relation to business development opportunities.
Woodside last month posted a 39 per cent drop in first half net profit to $925 million, amid the slump in oil prices that prompted it to sharply slash its dividend.
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