AFTER last year's flame-out at Nexus Energy, mining entrepeneur Richard Cottee has become non-executive chairman of oil shale and gas junior Austin Exploration, and is brimming with optimism about the company's blue sky potential.
Speaking after his appointment was announced yesterday, Mr Cottee said Austin's acreage in Colorado and Texas was bought cheaply and had the potential to produce 40,000 barrels of oil a day within five years.
With oil at $US100 a barrel and with low infrastructure costs by Australian standards, Mr Cottee said such production levels could throw off $1 billion of free cash and $500 million in profit each year.
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''The potential, as you can see, is quite large for a company that has a market cap of $20 million,'' Mr Cottee said. ''This is a share price that should, if we manage it correctly, replicate some of my past history.''
Mr Cottee, a former Santos executive, became managing director of Queensland Gas Co in 2002 and built its market value up from $20 million to $5.7 billion, the takeover price British Gas paid in 2008.
Mr Cottee made his fortune from the takeover, with his personal wealth estimated at $23.5 million by BRW in 2008.
But his next venture, Nexus Energy, ended in controversy last September when he resigned as chief executive after falling out with the board, partly over development of the Crux oil and gas field in WA's Browse Basin.
Mr Cottee tried to spill the Nexus board by requisitioning a general meeting but failed, as he now says, after several of the main shareholders ''asked me to run and then voted against me''.
Since Nexus's annual meeting in November, Mr Cottee said he had been ''enjoying myself on the beach''. He was keen to pursue a standalone liquids project at Crux, but last week those plans were jettisoned in favour of a $3.75 billion, integrated oil and gas project to be developed in a joint venture 80 per cent owned by Shell.
''I had to make the stand I did because I really don't think the company was going in the right direction,'' Mr Cottee said.
He had set up the company's finances so that debt repayments won't be due until 2014, when liquids from Crux would be in production. Now, he said, Nexus would not see revenues from Crux until next decade.
''Where's the money going to come from?'' he said.
Agreeing his reputation for commercial acumen had been tested during the Nexus dispute, Mr Cottee said, ''It may have been tested but I don't think the exam papers have been totally marked.''
While the terms of his new employment at Austin have not been finalised, Mr Cottee said his remuneration would be skewed towards performance, with a cash salary of about $80,000 a year and undisclosed share-based incentives.
Mark Hart, previously executive chairman at Austin, will become president and executive director. Shares in Austin rose 0.2¢ to 3¢.
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