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Exclusivity period extended to September 19

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HY profit falls 22.3% but beats analysts' estimates

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Interim dividend 13.4 cents per share

(Adds details, background in throughout)

Aug 25 (Reuters) - Australian gas producer Santos

on Monday agreed to further extend the exclusivity

period for an $18.7 billion takeover bid from a group led by Abu

Dhabi National Oil Co (ADNOC), and reported a better-than-feared

22% drop in first-half profit.

Its shares rose 1% in early trading after extending the due

diligence period to September 19 to give the consortium led by

ADNOC's investment arm XRG more time to secure required internal

approvals before making a binding takeover offer.

Santos said the consortium had on Sunday "again confirmed it

has not found anything in due diligence that would lead it to

withdraw its indicative proposal".

Analysts said the shares would likely be supported on Monday

by confirmation the deal was still progressing despite the

delays.

The company reported its first-half underlying earnings fell

to $508 million from $654 million a year earlier, hurt by weaker

realised prices for its liquefied natural gas (LNG) and oil. The

result was 3% above Visible Alpha forecast consensus.

While Santos shares rose to A$7.81 per share in early

trading after the two announcements, they remain more than a

dollar below the consortium's proposed offer of A$8.89 apiece.

The gain outpaced a 0.75% rise in the broader S&P/ASX200

index.

Santos last week flagged the consortium, which includes Abu

Dhabi Development Holding Company (ADQ) and private equity firm

Carlyle, would face a delay in finalising the offer for at least

a month.

The deadline for the exclusive talks between Santos and the

consortium expired last Friday. Santos can engage with a bidder

if a higher offer is made, but is prevented from talks with any

parties who match the XRG offer.

The proposed offer requires approval from regulators in

Australia, Papua New Guinea, and the U.S. given Santos holds

assets in each of those jurisdictions.