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Nexus Energy Ltd. (NXS.AU) on Tuesday said the company hasn't been approached about a possible takeover, after a local newspaper sent its shares soaring by reporting its shareholders were being sounded out over a A$480 million bid.

The Australian newspaper, citing industry sources, said that speculation was centering on a bid by Royal Dutch Shell PLC (RDSB), which has rights to gas from Nexus' Crux field in the Browse Basin offshore Western Australia state.

Nexus is understood to have no direct knowledge of the approach, the newspaper report said.

"Nexus advises that it has not been approached by any party, nor is in discussions with any parties in respect of a takeover of the company," Nexus said in a statement.

Shell wants to develop its Prelude field, also in the Browse Basin, using a floating liquefied natural gas vessel.

A Shell spokeswoman wouldn't comment on the takeover speculation.

"Crux gas is an integral part of the Prelude FLNG Project as a tie-back option to the FLNG facility that will be located over the Prelude and Concerto gas fields," the spokeswoman said.

Nexus on Tuesday halted trading in its shares, which had risen 23% to 37.5 cents immediately before the halt commenced, short of the rumored 50 cents per share takeover price cited by the newspaper.

When the halt was lifted at 0245 GMT, and after Nexus's statement saying it hadn't been approached, the shares lost a little ground, then recovered to be up 21% at 37 cents by 0250 GMT.

The shares commenced a downward spiral from A$1.75 each in May 2008 after Japan's Mitsui & Co. (MITSY) withdrew a US$255 million offer for 25% of Crux, citing market conditions.

Since then, Nexus has unsuccessfully tried to sell 50% of the Longtom gas project offshore Victoria state--its only producing asset--to AED Oil Ltd. (AED.AU) last year but the transaction fell through after the project wasn't built on time.

Investors' hopes were reignited a little in April when Nexus appointed highly regarded former Queensland Gas Ltd. head Richard Cottee as its new chief executive, but it subsequently had to shut Longtom for at least three months after mercury was found in the gas.

Crux had been a good investment for Nexus since it bought it for A$12 million in 2006. It sold the gas from the project to Shell for A$52 million but keeps the rights to the condensate, which is a light oil.

It sold 15% of the Crux liquids project to Japan's Osaka Gas for A$75 million in 2007.

Nexus, however, has a deadline to develop the liquids, having agreed to pass the condensate ownership rights over to Shell from Jan. 1, 2021.

The company's shareholder register is diverse, with the largest shareholder--Norway's Clauson shipping family--owning just 7.2% of the stock, followed by a 6.3% slice owned by U.K. fund manager M&G.

The Australian reported that "it is understood one of the shareholders that has been sounded out is London-based".

Nexus non-executive director Symon Drake-Brockman, the former head of capital markets at U.K. bank RBS, owns a further 4.9% of the stock.

No other interests are significantly larger than 1%, although companies connected to the family of late Melbourne industrialist Victor Smorgon hold several separate stakes.

-By David Fickling and Ross Kelly, Dow Jones Newswires; +61 2 8272 4689; david.fickling@dowjones.com

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