VPC Venture Prod.

RNS Number:5893B
Venture Production PLC
18 April 2006


18 April 2006

                             VENTURE PRODUCTION plc

                       Formation of Strategic Partnership

Venture Production plc, the Aberdeen based, UK independent oil and gas
production company, today announces that it has formed a strategic partnership
with a group of North American based investors to acquire and develop 'stranded'
gas assets in the southern sector of the UK North Sea. The partnership, known as
North Sea Gas Partners, will initially have a total of $300 million in
commitments, which will invest alongside Venture in acquisition and development
opportunities. Venture will provide 33.3% of the total commitments to the
partnership - $100 million, which will be satisfied out of Venture's cash
resources.

The North American investors are led by ArcLight Capital Partners, a US based
private equity firm that specialises in investment in the upstream E&P and power
generation sectors. ArcLight will commit $125 million to the joint venture with
$75 million being provided by two further North American institutional investors
in equal amounts.

North Sea Gas Partners will acquire and develop assets in the Southern North Sea
alongside Venture Production, which will act as the field development and
production operator of the developments. In return, Venture will receive an
enhanced rate of return if the projects NSGP participates in exceed a specified
return on investment.

Forming the partnership enables Venture to achieve three key objectives:

1)   pursue larger opportunities than would be possible alone;

2)   enables Venture to benefit from the value that it creates as operator;
     and

3)   futher diversifies Venture's portfolio while retaining operational
     control.

Commenting on the news, Mike Wagstaff, Chief Executive of Venture said

"North Sea Gas Partners represents a fantastic opportunity for Venture to deploy
additional resources in developing 'stranded' gas assets in the North Sea at a
time when bringing gas onstream is a strategic priority for the UK. We are
delighted to have attracted a lead investor of ArcLight's calibre and resources.
We are currently looking at a range of opportunities in the Southern North Sea
and North Sea Gas Partners will provide us with an ability to develop a larger
portfolio of assets whilst also providing an enhanced return on each Venture
pound invested."


ENDS

Contact

Venture Production plc

Mike Wagstaff, Marie-Louise Clayton, Rod Begbie, Doug Fleming

                                                 01224 619 000

Patrick Handley, Brunswick                       0207 404 5959
John MacDonald, Weber Shandwick                  01224 806 600


Notes to Editors

Southern North Sea
For purposes of the North Sea Gas Partners joint venture, the Southern North Sea
is defined as Quadrants 40 - 57 of the UK Continental Shelf inclusive. North Sea
Gas Partners is not, however, precluded from acquiring assets alongside Venture
in other parts of the North Sea.


ArcLight Capital Partners
ArcLight Capital Partners is a leading energy investment firm with more than
$4.6 billion under management.  ArcLight invests across the energy industry
value chain in hard assets that produce high current income and capital
appreciation.  Founded in 2001, ArcLight has its headquarters in Boston and an
office in New York City.  ArcLight has 21 investment professionals and is led by
its founders Daniel R. Revers and Robb E. Turner.  ArcLight's investment team
has extensive energy investing experience, industry relationships, and asset
level knowledge.


ArcLight will be investing in North Sea Gas Partners from its $1.6bn ArcLight
Energy Partners Fund II raised in 2004. This fund has a portfolio of upstream
oil and gas and power generation investments across Europe, Canada and the USA.


Joint Operating Arrangements
Venture will directly hold a stake in each asset in which North Sea Gas Partners
invests. Venture will, therefore, have a net interest in the asset that will be
the sum of its directly held stake and its indirect stake through its investment
in North Sea Gas Partners. The direct stake will allow Venture to be appointed
as Operator of the asset and a standard joint operating agreement has been
agreed between Venture and North Sea Gas Partners.


Venture's Enhanced Return
Venture has contributed 33.3% of the $300m commitments to North Sea Gas
Partners. If, however, the projects within North Sea Gas Partners deliver or
exceed a specified return on investment to ArcLight and the Investors then,
above this threshold, Venture will receive greater than a 33.3% share of profits
from the joint venture. This upside potential is designed to reward Venture for
its value added as operator. It provides Venture with the potential to generate
a greater return on its investment than would be the case if Venture were to
develop these assets through standard industry joint operating arrangements.
This type of mechanism is common in other industries such as fund management and
real estate.


Venture Production plc

   * FTSE 250, fast growing, independent oil and gas producer.
   * Based in Aberdeen.
   * Venture had 161 million barrels of oil equivalent proven and probable
     reserves at 31 December 2005, an increase of 29% on 31 December 2004.
   * Venture will announce its full year results for 2005 on 25th April 2006.



Venture Production plc in the Southern North Sea

   * Venture entered the Southern North Sea ("SNS") in 2001 through the
     acquisition of interests in the Audrey, Ann and Alison gas fields.
   * Venture has built its SNS business through serial acquisition, multiple
     major commercial transactions and a portfolio of development, appraisal and
     exploration wells within the 'A' Fields hub over the period 2001 - 2006.
     Most recently Venture announced the acquisition of the large Ensign gas
     discovery (300 - 400 Bcf gas initially in place) in November 2005.
   * Venture has interests in eight discovered SNS gas fields:
     - five in production (Audrey, Ann, Alison, Annabel and Saturn).
     - two near-term developments with the potential to be on stream by end
       2006 (Mimas and Rhea).
     - five further near term exploration and appraisal opportunities
       (Amanda, Agatha, Adele, Channon and Ensign).
     - at the end of 2005, total net proved and probable gas reserves from
       these interests amounted to 314 Bcf with a further 200 Bcf of additional
       possible net reserves.
   * Venture is currently producing approximately 180 MMcfd net from these
     assets (c 30,000 boepd).







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

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