VPC Venture Prod.

RNS Number:0942H
Venture Production PLC
02 August 2006

2nd August, 2006

                             VENTURE PRODUCTION plc

                      Venture Announces Acquisition of CH4


Venture Production plc ("Venture"), the Aberdeen based UK independent oil and
gas production company, today announces that it has acquired the entire share
capital of CH4 Energy Limited ("CH4"), a privately owned, UK headquartered gas
production company. CH4's operations are focussed wholly on the southern North
Sea gas basin and include a manned platform in the Dutch North Sea ("DNS") and
an onshore operating base near Amsterdam.

The consideration paid for CH4 consisted of part-cash, part-equity and amounted
to a value of Euro224.0 million (approximately #153.2 million) based on an
effective date of 30th June 2006, a Venture share price of #7.60 and an exchange
rate of #1 = Euro1.4618. The consideration consisted of Euro123.5 million in cash
(approximately #84.5 million), plus 9.05 million newly issued Venture ordinary
shares. The cash consideration was satisfied from Venture's existing bank
facilities and included Euro16.5 million of working capital.

CH4's assets are concentrated around the UK/Dutch median line and are dominated
by its operated interests in the producing Markham gas field (37.5% unitised
interest) and the Chiswick gas field currently under development (95.0%
interest).

The Markham gas field, which has been on stream since 1992, straddles the median
line between the UK and Dutch sectors of the North Sea and is located in blocks
49/5a and 49/10b on the UK side and blocks J/3b and J/6 in the Dutch sector. It
has two pipeline-linked fixed steel platforms, one of which is permanently
manned. With the ongoing installation of a new compression tower, Markham is set
to become an even more important processing and transportation hub for new gas
production in the southern North Sea.

Chiswick, located in UK block 49/4a, was discovered in 1984 and has since been
appraised by three further wells. FDP approval for development as a satellite to
Markham was received in July 2006 and the first Chiswick development well is
expected to come on stream during the first quarter of 2007. A second well is
due on stream during the third quarter. Contracts for drilling rigs and all
related development services are in place to cover both wells and the tie-back
of the new field. Export terms have been agreed for transportation of the gas to
the Den Helder terminal in the Netherlands.

In addition, CH4 has interests in the producing Windermere (20.0% interest) and
J/3c fields (4.025% interest), both of which have been developed as tie-backs to
the Markham facilities. Venture is also acquiring CH4's 25% interest in the ETS
pipeline system in the southern North Sea, currently used by the Trent, Tyne and
Tors fields.

Venture estimates of total proven and probable reserves acquired amount to
approximately 184 Bcfe (30.7 MMboe) as at 30 June 2006. CH4 is currently
producing approximately 22 MMcfpd (3,700 boepd) and this is expected to rise to
an average of approximately 67 MMcfpd (11,200 boepd) for calendar year 2007.

CH4's balance sheet Gross Assets at 31 December 2005 were Euro97 million and CH4's
Profit before Tax for the twelve months to 31 December 2005 was Euro850,000.

CH4 was owned by 3i Group plc, Trust Company of the West and management and
employees. In aggregate, the selling shareholders now own approximately 6.8% of
the enlarged ordinary share capital of Venture. Completion of the acquisition
took place on 1st August 2006.

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

"We are delighted to have secured the opportunity to combine such a high quality
business as CH4 with Venture's own gas operations. This acquisition adds a
fourth operated production hub to our portfolio and materially expands the scale
and 'footprint' of our southern North Sea gas business. It is another
significant step in implementing our proven strategy of acquiring and developing
'stranded' hydrocarbon reserves in the North Sea.

CH4's assets will immediately increase Venture's proven and probable reserves by
around 20% and, once Chiswick comes on stream, our production levels from 2007
onwards will be significantly higher. CH4 represents an outstanding fit with
Venture's existing operations and our operatorship-led business model.

The CH4 team has done an excellent job in both unlocking the untapped potential
in the Markham area and driving forward the Chiswick development. We welcome
them to Venture and look forward to working with them to deliver the Chiswick
development and the Markham compression projects over the coming months."

Graeme Sword, Partner 3i Oil, Gas and Power, the principal shareholder of CH4,
commented:

"3i has supported CH4 from its start up in 2002 and has provided capital and
strategic support to develop CH4 into a significant business with a broad
portfolio.

Coincidentally, 3i was also a founding shareholder in Venture where we were
pivotal to the early development of the business until its IPO in 2002. We
believe that CH4 is a compelling fit for Venture and will cement its position as
the UK's leading North Sea independent."


                                      ENDS


Contact:


Mike Wagstaff, Chief Executive
John Murphy, Chief Operating Officer
Marie-Louise Clayton, Finance Director
Rod Begbie, Corporate Development Manager 01224 619000

Patrick Handley, Brunswick
Chris Blundell, Brunswick 020 7404 5959

John MacDonald, Weber Shandwick (Scottish press) 01224 806600


Notes to Editors


CH4 Energy Limited


   * London and Hoofddorp (near Amsterdam) based, UK independent gas
     producer, focused on the UK and Dutch sectors of the North Sea.
   * Privately held company established in May 2002 as a southern North Sea
     gas business and built through five separate acquisitions.
   * Balanced portfolio of producing, development, processing, transport and
     exploration assets.
   * Employs 7 staff and contractors in London, 35 in Hoofddorp in the
     Netherlands and 32 staff and contractors offshore.
                                     

Markham

   * Discovered in April 1984 (49/5a-2 well) with extension across median
     line confirmed by exploration well in Dutch sector (J/6-1 well) in 1987.
   * Located in blocks 49/5a and 49/10b (UK) and blocks J/3b and J/6
     (Netherlands).
   * 170km northwest of Den Helder in 36m water depth.
   * Two pipeline-linked fixed steel platforms (J/6A - manned, normal crew
     14; ST1- normally unmanned) plus compression module on J/6A .
   * Production commenced in November 1992 reaching a peak in 1995.
   * Potential infill target on western flank could be drilled from ST-1
     platform through re-entry and sidetrack of suspended production well.
   * Gas currently processed from Windermere, K/4a-D, J/3C and K/1A in
     addition to Markham gas with Chiswick and Grove (Operator : Newfield)
     developments committed to tie-back to J/6a platform.
   * New lo-lo compression tower currently under construction with risers and
     reception facilities for new incoming fields.
   * Total processing capacity of 400 MMscfpd delivering ample capacity for
     additional equity gas or third party processing.
   * Partners and Unitised Interests : CH4 (37.5% and operatorship), EBN
     (29.5%), Total (22.1%), Dyas (4.4%), RWE Dea (3.4%), Euroil (3.1%).

Chiswick

   * Located in block 49/4a and discovered in 1984 (49/4-1 well) with three
    subsequent appraisal wells.
   * 18 km northwest of Markham and 150km northeast of Bacton in 41m water
    depth.
   * FDP approval received in July 2006 to drill two initial development
    wells targeting two fault blocks (Alpha and Gamma 1) to be drilled in 2H
    2006 and mid-2007 respectively.
   * Minimum facilities platform tied-back to Markham J6A with transportation
    via K13 extension and WGT pipelines into the Den Helder gas terminal in The
    Netherlands.
   * Expected field life of between 8 and 13 years.
   * Depending on the results of the first two development wells up to three
    further infill wells may be drilled into the reservoir.
   * Partners and Working Interests : CH4 (95% and operatorship), Wintershall
    (5%).



Windermere

* Located in block 49/9b and discovered in 1989 (49/9b-2 well).

* 7 km west of Markham in 35m water depth.

* Currently one production well producing through a minimum facilities
platform tied-back to Markham ST-1.

* Partners and Working Interests : CH4 (20%), RWE Dea (60% and
operatorship), Noble Energy (20%).


J3c

   * Located in blocks J/3a and J/6 and discovered in 1995 (J6-A5 well) by
    well drilled from Markham J6A platform.
   * Partners and Unitised Interests : CH4 (4.025%), EBN (50.000%), Total
    (29.050%), NAM (15.200%), Dyas (1.725%).


ETS Pipeline

   * 165km, 24 inch pipeline with 500 MMscfpd capacity (part of the EAGLES
     system).
   * Delivers dry gas and condensate from the Trent and Tyne fields to the
     Bacton terminal on the Norfolk coast.
   * Installation of additional compression at Trent field in March 2006 has
     extended field life and enhanced opportunities for third party business
    (demonstrated recently by the already producing Tors fields).


Venture Production plc

   * Aberdeen based, UK independent oil and gas producer, focused on the
     North Sea
   * Listed on the London Stock Exchange with a market capitalisation of
     approximately #960 million
   * Net average production guidance for 2006 of 40,000 to 42,000 boepd
   * Proved and Probable Reserves of 161 MMboe (at 31 December 2005)


In April 2006 Venture announced its 2005 results

   * Turnover up 101% to #164.1m (2004 : #81.5m)
   * Profit After Tax #31.1m (2004 : #5.5m loss)
   * Operating cash flow up 76% to #77.1m (2004 : #44.1m)
   * Average production up 77% to 29,864 boepd (2004 : 16,832 boepd)


Venture's 2005 Annual Report and Accounts may be downloaded from www.vpc.co.uk.


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

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