Addressing shareholders in Sydney yesterday, Novus managing director, Mr Bob Williams said any one of their upcoming wells has a chance of delivering Novus that prize in the next 12 months.

He told the meeting that drilling in their Padre Island permit off the south-west coast of Texas had potential for up to one trillion cubic feet (tcf) of gas while the Arabian Gulf project could eventually see "tens of tcf's".

"By the next AGM, I am confident that we will be able to be reporting more success, at least in the shallow section of the US, and perhaps we will have drilled our first offshore well in Arabia.

"We'll be hoping to drill our first onshore well in Arabia in 2003," Mr Williams said.

The Novus boss said the company's Australian base had helped it gain exposure to major oil and gas provinces in parts of the world that were energy hungry but were reluctant to become involved with North American energy groups.

Novus was also optimistic about commercialising large gas reserves in Pakistan where energy demand is growing.

Novus chairman, Mr David Blair, told the gathering that this year's drilling costs were expected to be more than $100 million, which exceeded the company's budgeted free cash flow from operations. According to Mr Blair this demonstrated the value of the alliance with Japanese trading house, Mitsui & Co and its $56 million equity injection into the company.

Mr Williams did not discount the possibility of Novus becoming a takeover target because of the company's portfolio and said the most likely suitor would be an independent American exploration and production company looking to expand by buying undervalued assets.

Novus shares yesterday fell 3c to $2.27 after the meeting.