Energy company Santos has made a merger approach to Oil Search in the past six weeks.
The merger ratio in the latest offer results in Oil Search shareholders owning 37 per cent of the merged entity and Santos shareholders owning 63 per cent of the merged entity.
It is understood that working on the plan for Santos has been investment bank Citi.
Oil Search is working with Macquarie Capital and Goldman Sachs as its defence adviser.
Last year, Oil Search came under pressure when the oil price plunged to about $US45 per barrel on the back of the global pandemic, prompting the interest from Santos.
However, Oil Search is thought to have not shown interest in a merger with Santos, which is understood to have been expressed in meetings with its rival.
Santos is releasing the details of a merger proposal with Oil Search to the market on Tuesday.
An offer was made for Oil Search by three weeks ago and is understood to have followed at least one other approach that extended as far back as December.
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