VPC Venture Prod.

RNS Number:5879O
Venture Production PLC
06 July 2005


7th July, 2005

                             VENTURE PRODUCTION plc
                   ("Venture", "the Company" or "the Group")

                     Operational Withdrawal From Trinidad 

Venture Production plc ("Venture"), the Aberdeen based UK independent oil and
gas production company, today announces that it has entered into an agreement to
sell its Trinidad operations (Venture Production Trinidad Limited or "VPTL") to
Ten Degrees North Energy Limited ("TDN"), a recently formed Trinidadian company.

TDN has been established by Dr Jim Lee-Young, previously Venture's General
Manager in Trinidad and Bruce Dingwall, who was a founder and former Chief
Executive of Venture. Venture will retain an interest in its Trinidadian assets
through a 40% equity stake in TDN and will appoint a representative to the
Board. However, Venture will cease to have any direct operational involvement in
Trinidadian operations, consistent with its corporate focus on expanding its
United Kingdom Continental Shelf ("UKCS") business.

The consideration payable to Venture upon legal completion comprises:
     
     *    $11.0 million in cash proceeds;
     *    $10.0 million nominal in convertible subordinated notes (the "Loan
          Notes"); and
     *    9,000 shares of $1,000 common stock representing 40% ownership of TDN.

In addition, including approximately $2.0 million of cash working capital at 31
December 2004, gives a headline value of the gross assets of VPTL of
$32.0 million, consistent with the book value post the exceptional write down at
the end of 2004. In the year to 31 December 2004, VPTL made an operating loss of
#2.0 million before an exceptional writedown of #18.1 million. At
31 December 2004, VPTL had Proven and Probable reserves of 8.2 million barrels
of oil equivalent ("MMboe"), almost entirely oil, over 70% of which were
undeveloped. Average net daily production in 2004 was 1,200 boepd, or
approximately 7% of total Group production.

The cash consideration to be received by Venture will be used to reduce current
bank borrowings. The Loan Notes will carry a coupon that increases through time
from 2% to 9% and are repayable from 2010 onwards. In addition, 50% of the Loan
Notes will be convertible into TDN equity at $1,500 per share in the event that
the rate of return to TDN investors exceeds a specified level. In the event that
TDN achieves certain valuation events within a 24 month period from completion,
including being listed on a recognised stock exchange, or being sold or raising
significant additional equity and the rate of return to initial TDN investors is
below a certain threshold, the subscription price of their equity will be
adjusted downwards (subject to a maximum 20% adjustment) so as to ensure a 15%
internal rate of return is achieved on the new capital invested.

In addition to the 40% to be owned by Venture, TDN will be 24.4% owned by
Trinidadian institutions with the remaining 35.6% to be held by Messrs Lee-Young
and Dingwall, who are both Trinidadian citizens. The sale of VPTL to TDN
constitutes a related party transaction and, as such, the agreement is
conditional upon the transaction receiving shareholder approval. A circular will
be sent to shareholders containing full details of the transaction and the date
of an Extraordinary General Meeting as soon as possible.

Venture's decision to withdraw from Trinidad resulted from a strategic review of
its Trinidadian operations in the context of their reduced materiality within
Venture's portfolio. The Board, sensitive to the related party nature of this
disposal, took appropriate steps to explore all available options for the
planned withdrawal after an approach by TDN during the fourth quarter of 2004.
As a result the Board has unanimously concluded that this transaction represents
the best available value for shareholders, not only in terms of current value
but also potential future value upside.

In addition to shareholder approval, the transaction is subject to Trinidadian
regulatory approvals and is expected to complete in the fourth quarter of 2005.

Commenting on the announcement, Mike Wagstaff, Chief Executive, said:

"With the recent rapid growth of our UK business, Trinidad now represents a very
small part of our ongoing operations and operational withdrawal, in order to
focus all our resources on developing our North Sea business, is the correct
course. Nevertheless, we believe that there remains significant potential value
in these Trinidadian assets, which we wish to retain for shareholders. We
believe that a local Trinidadian funded and managed company will be best placed
to unlock this potential. We have therefore structured a transaction where we
receive a fair headline valuation for the assets in their current largely
undeveloped state yet retain a material interest in the upside."

                                      ENDS
Contact:

Mike Wagstaff, Chief Executive
Jon Murphy, Chief Operating Officer                          01224 619000
Rod Begbie, Corporate Development Manager

Patrick Handley, Brunswick                                   020 7404 5959
Chris Blundell, Brunswick

Notes to Editors:

     *    Upon legal completion of the disposal announced today Venture will
          transfer its entire interests in Trinidad to TDN, a newly established
          company in which it will hold 40% equity ownership.

     *    Venture's Trinidadian interests consist of:

     Licence/Concession   Venture Interest   Operator   Status

     WD-13                     100.0%          VPTL     Producing oil field
     WD-14                     100.0%          VPTL     Producing oil field
     Tabaquite                 100.0%          VPTL     Producing oil/gas field
     Brighton Marine           100.0%          VPTL     Producing oil field
     Point Ligoure              50.0%          VPTL     Producing oil field

     *    This will leave Venture wholly focused on the United Kingdom 
          Continental Shelf ("UKCS")

     *    Venture's Trinidadian assets had been expected to produce at an 
          average rate of around 2,400 barrels of oil per day ("bopd") net to 
          Venture in the 12 months to 31 December 2005, subject to an investment 
          programme which will now be the responsibility of TDN to implement.

     *    Venture currently owns interests in 21 fields in the UK North Sea of
          which 10 are in production (all operated), 11 are either under 
          development or near term development candidates (eight operated).


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END
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