Takeover target AWE has advised of a delay in progressing toward development of the prized Waitsia gas field in Western Australia pending resolution on its agreed $602 million offer from Japanese trader Mitsui.

AWE managing director David Biggs said the terms of the Mitsui takeover deal prohibit AWE from signing up gas contracts with customers for Waitsia gas. That deal, together with the recent sale of AWE's partner in the field, Lattice Energy, to Beach Energy, has also delayed a final go-ahead for development.