ARROW Energy has agreed to sell its Australian coal-seam gas assets to Shell PetroChina for an improved offer of $3.1bn (£2.8bn).
The revised takeover offer, which needs approval from Australian regulators and Arrow shareholders, is up from $2.96bn.
Under the deal, Arrow will spin off its assets outside Australia – including interests in China, India, Vietnam and Indonesia, into a new company, Dart Energy.
The accepted offer came too weeks after an initial offer was deemed unacceptable.
Shell's chairman in the region Russell Caplan said: "I can tell you, it was not an easy discussion."
Shell and PetroChina are now offering A$4.70 a share in cash for Arrow's Australian assets plus one share in listed Dart Energy.