They said the offer "must be benchmarked against current assets and performance of the company", taking into account those discoveries, and not the past share price.

It also said it hoped it would announce the spud date for the Hovea-2 appraisal well within a fortnight.

In response to the TAP bid, described as a merger for capital gains tax roll over relief purposes, Arc said TAP was trying to gain control before the appraisal programs for the two discoveries.

"The timing of the bid is such that is appears that Tap is seeking to gain control of the company prior to the important appraisal programs on these oil discoveries and the assessment of the results of the recently acquired 3D seismic survey over a large part of the ARC's highly prospective acreage," Arc said.

"If the Tap offer is successful, Arc shareholders leverage to these assets will be significantly diluted.

Arc also said any bid must include consideration for intangibles such as Arc's experience as a gas market principal.

It has appointed its team of advisors including PriceWaterhouseCoopers, Mallesons Stephens Jacques and Origin Securities.

Arc directors reiterated their advice to shareholders to do nothing until they had received their Arc target statement.