Both companies are Cooper Basin explorers and producers, and they are partners in several fields and prospects.

In June, Beach paid $14.5 million for a 19.9% shareholding in Great Artesian, which it acquired from the three founding directors – Shaw, Norman Zillman and Michael Callahan.

As a result, Zillman and Callahan stepped down from the board, with three Beach directors appointed in their place. At the time, both Beach and Great Artesian said Shaw would continue in his role as managing director.

But in a statement yesterday, Great Artesian chairman John Butler said as part of the June share sale agreement, “Dr Shaw gave written undertakings that he would resign as managing director and as a director on or before … December 31, 2006.”

Shaw told PetroleumNews.net that it was now up to Beach to decide whether to extend his termination date beyond that point.

“I’ve been put into caretaker mode for the time being, although I would be happy to stick around and see myself continue with the company,” he said.

Shaw acknowledged that Great Artesian’s major shareholders were suspicious of Beach’s intentions and were viewing the move as a step towards a potential takeover.

“Just before the share sale, I’d renewed my employment contract for an additional three years,” he said.

“I agreed with Beach that I’d stay on for at least another six months until they had bedded down what they wanted to do.”

Commenting on the potential for a takeover, Shaw said he believed the two companies could make a good fit and would diversify Beach’s Cooper Basin assets, which increased significantly following its $574 million acquisition of Delhi Petroleum two months ago.

“Delhi’s interest was production rather than pure exploration interest, which would fit with Great Artesian’s assets very nicely,” he said.

“But then, Beach is still digesting this acquisition, so now might not be the right time for them to make a move on us.”

If Shaw’s termination date is not extended beyond the rest of this year, Butler said the company would appoint a “suitably qualified person” to take over as managing director.

As for Shaw, who still holds a 4.5% stake in the company, he said he would “perhaps take a holiday”.