The Australian subsidiary of the Canadian firm Precision Drilling Canada - Precision Australia - will offer $2.25 for each AOG share and $1.05 for each unexercised AOG listed option, which values AOG at approximately $144 million.

AOG told the stock exchange today that at $2.25, the Precision Australia bid is 32% higher than the current offer by Ensign and recommended to AOG shareholders to accept the bid.

The acquisition would extend Precision's international rig fleet by 26 to 41 rigs and its total worldwide rig fleet to 274.

Precision Australia intends to lodge the full terms of its offer and Bidder's Statement with ASIC within seven days and which is subject to a number of conditions.

Currently AOG is trading at $2.28 per share, up 29 cents or nearly 15% on yesterday's trading.