The objective of this study is to improve the real-time operation of an AC microgrid for a network with high line R/X ratios. In specific, it is intended to achieve a stable microgrid operation along with accurate power sharing and minimal steadystate frequency deviation following a load disturbance. A novel droop control (DC) methodology is proposed in this regard. For a network with high line R/X ratios, there exists coupling between active power and reactive power. In existing power transformation-based approaches, the actual power sharing among different sources remains variable though both the system stability and the steady-state frequency profile can be excellent. In the DC methodology proposed, the concept of power transformation is replaced with direct power versus voltage and reactive power versus frequency droop equations. However, the active power versus voltage and reactive power versus frequency cross-couplings are taken into account only during the transient period. Therefore, the steady-state power sharing takes place in the similar manner as in the case of the normal decoupled DC. All the droop parameters are independently tuned optimising the stability performance of the system. The robustness of the proposed methodology is verified through a detailed case study. © The Institution of Engineering and Technology 2017.