Cottee departure sends Nexus into nosedive
THE man brought in to turn around Nexus Energy, former Queensland Gas managing director Richard Cottee, yesterday quit the company, prompting a collapse in its share price.
THE man brought in to turn around Nexus Energy, former Queensland Gas managing director Richard Cottee, yesterday quit the company, prompting a collapse in its share price.Nexus said Mr Cottee "has ceased employment effective immediately".Mr Cottee's appointment in early 2010 was widely seen as the trigger to unlock the value of its troubled Crux liquids project in Western Australia, with brokers immediately slapping "buy" recommendations on its shares, while tipping their price would surge to around 50? from its then level of around 30?.Yesterday's news resulted in the shares slumping. They closed down 13c to 12c as investors headed for the exits.Nexus's share price peaked in early 2008 at around $1.70 amid optimism over the prospects for the Crux asset. Development costs for Crux had been put at more than $US700 million, forcing the company to seek partners.It was also planning to sell down its interest in the Longtom gasfield to raise further funds as well, with a $122 million fund-raising earlier this year shunned by smaller shareholders, forcing underwriters to pick up a significant shortfall.The company's share price collapsed from more than $1.20 to only around 40c in early 2009, when Mitsui & Co walked away from a deal to buy into the Crux project. It had been negotiating to take a 25 per cent stake for $US255 million."The company cited 'personal reasons' for Cottee's move," one analyst said. "But it seems like a deal was on the table which the board didn't agree with. A lot of institutional and retail investor interest in Nexus was due to Cottee, and his departure will see the selling continue."Brokers speculated the collapse of the Nexus share price could prompt Shell to move, since it needs more gas for its Prelude development nearby.Mr Cottee had a three-year contract, with three months' notice required to terminate. If made redundant, he would be entitled to six months' fixed remuneration. In the year to June, his remuneration package totalled $1.39 million, including $382,500 in share-based payments.Queried after yesterday's share price collapse, Nexus said it did not believe the sell-off had anything to do with the company's prospects, saying negotiations to commercialise the Crux field and another asset, Echuca Shoals, are continuing.