Chief executive Bruce Butcher’s contract had expired and he had not been offered a new contract, the company said in a statement.

Chief operating officer Andrew Purcell will replace Butcher on a temporary basis.

Butcher’s departure was regarded as the result of former NSW Olympics minister Michael Knight placing his authority on the company in his new role as chairman, the Financial Review newspaper reported.

The company is currently offside with the state government after Butcher and the state’s minister for mineral resources, Kerry Hickey, had a “stand up” argument last year.

A loss of government favour comes at a time when public opposition is gaining to the company’s proposed 30-well project at Spring Farm, in metropolitan Sydney, as part of the Camden Project’s second stage to reach 140 wells.

The land is earmarked for housing and is owned by the state, Mirvac and developer the Cornish Group.

But an envisaged 200-well project in the Yarramalong and Dooralong valleys on the state’s central coast is causing more potential opposition to Sydney Gas.

The company’s aggressive tactics prompted the formation of the public opposition group Australian Gas Alliance whose supporters include former NSW premier Neville Wran and Leighton general manager John Faulkner, the newspaper said.

Alliance legal advisor Tony Davis said a legal fight over access rights for each of valley's wells could take two years, severely delaying the proposal.

The Alliance is also backing another challenge from an elderly landowner to the company’s Camden operations.

It is expected the NSW chief mine warden will hear the man’s case and the Spring Farm 30-well proposal next month, after which lengthy legal battles could start.

Sydney Gas’ shares have almost halved in the past eight months, closing at 66 cents yesterday.