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SYDNEY--Eureka Energy Ltd. (EKA.AU) on Wednesday reversed its position and recommended that its shareholders accept a A$107 million takeover bid from Aurora Oil & Gas Ltd. (AUT.AU).

Eureka had said previously that the offer of 45 cents per Eureka share undervalued the U.S. shale oil and gas explorer.

Although its directors still assert the bid is too low, they've nevertheless recommended it because the offer price is final, Aurora has already gained acceptances for about a third of its shares, and given tough market conditions, Eureka said.

U.S. oil and gas company Lonestar Resources Inc. withdrew a non-binding rival merger proposal after the companies failed to agree on the terms over the weekend.