The company has offered one MHR common stock for every 27.8 Ambassador shares, implying a value of 34c per Ambassador share - a significant premium on Drillsearch's offer last month of 29.3c per Ambassador share.

MHR gained its first exposure to the Cooper Basin through a stake in New Standard Energy, which it is helping gain a foothold in the Eagle Ford shale in Texas.

The company was attracted to Ambassadors 100% owned PEL 570 licence during its evaluation of its equity position in New Standard, believing that its extensive experience in US shale plays would enable it to make strong use of the prospect.

"We believe that the knowledge we have gained over the past five years in successfully exploring the Eagle Ford, Bakken, Marcellus and Utica Shale plays is transferrable to the Cooper Basin of Australia," MHR CEO Gary Evans said.

"As we have learned from our exposure to shale plays in the US, early movers have the greatest opportunity for eventual success."

The US explorer is seeking to engage with the board of Ambassador to obtain its support for the deal, with the board and several major shareholders already having thrown their support behind the Drillsearch deal last month in the then absence of a superior offer.

MHR is selling its offer as an opportunity for Ambassador's shareholders to retain exposure to existing upside potential, while opening themselves up to widespread US operations and an experienced management team.

The company plans to issue approximately 5.1 million shares of common stock in order to acquire 100% of Ambassador, equivalent to 2.6% of its outstanding shares as of yesterday.