VPC Venture Prod.

RNS Number:4919R
Venture Production PLC
03 April 2008


3 April 2008


                            VENTURE PRODUCTION plc

                              CMS Gas Acquisition

Venture Production plc ("Venture"), the Aberdeen headquartered UK independent
oil and gas production company, today announces that it has agreed to acquire a
package of interests in six proven but undeveloped gas discoveries close to
existing infrastructure in the Caister Murdoch System, one of the most important
gas export hubs in the southern North Sea. Estimated recoverable resources net
to Venture total 266 billion cubic feet ("Bcf") and two of the fields to be
acquired are anticipated to have Field Development Plans ("FDPs") submitted
during 2008. The package of assets is being acquired from Tullow Oil plc for a
consideration of �35 million in cash at completion.


Cygnus (Blocks 44/12a and 44/11a, Venture 35%)

The largest asset in the package is Cygnus, a large multi fault block
accumulation discovered in 1988 by the 44/12-1 exploration well which found gas
bearing Leman reservoir. An appraisal well drilled in 1989 (44/11-2) confirmed
the presence of both Leman and Carboniferous reservoir in a separate fault block
and a 2006 appraisal well (44/12-2) in the original discovery fault block
confirmed gas bearing reservoir in both the primary Leman and secondary
Carboniferous intervals. With an estimated 1,000 Bcf of gas in place (gross P50)
from the Leman reservoir alone, Cygnus is one of the largest undeveloped
discoveries in the southern North Sea and Venture believes there to be
significant appraisal potential to the north of the structure.

The intention in the first phase of the development is to drill a production
well into the discovery fault block ("FB1") and to drill two further appraisal
wells to confirm recoverable volumes in additional fault blocks. First gas from
Cygnus FB1 is anticipated by the end of 2010 and subsequent development phases
would see these second and third fault blocks brought into production. With the
potential development of up to five additional fault blocks providing
significant upside potential, it is possible that the field could stay in
production for around 20 years.

Venture is acquiring a 35% non-operated interest in Cygnus and from the first
two planned phases of development alone estimates there to be net recoverable
resources of around 186 Bcf. It is anticipated that an FDP submission will be
made during 2008 and a development well drilled later this year or in 2009,
subject to the availability of a suitable rig. Two export route options exist,
one of which is the ETS pipeline system 17 km from Cygnus in which Venture
acquired an interest as part of its acquisition of CH4 in 2006. The two
appraisal wells are scheduled to be drilled in either late 2008 or early 2009.


Humphrey (Blocks 44/16a and 44/11a, Venture 17.5%)

The second asset that is close to FDP submission is the Humphrey discovery in
blocks 44/16a and 44/17a. Humphrey was discovered in 2006 and is a stratigraphic
trap on trend with the producing Munro field, which is seen as a close reservoir
analog. Venture will acquire a 35% interest in block 44/16a which contains
around 50% of the accumulation. Estimated gross recoverable resources are 35 -
40 Bcf developed through a single horizontal subsea well tied back to nearby
infrastructure. Development option screening is underway with a development
decision expected by the end of 2008 with the potential for first gas by end
2009.

In addition to the development of the existing Humphrey discovery, the block in
which Venture will acquire its interest contains the 100 Bcf gas in place
Humphrey NW prospect which, if proven, could be developed via a single subsea
well tied back to Humphrey infrastructure.


Copernicus and Kepler (Blocks 44/16b and 44/16c, Venture 35%)

Copernicus is a Carboniferous discovery in block 44/16b. It was discovered in
1991 by well 44/16-1 which tested gas at up to 30 million cubic feet per day
("MMcfpd"). An appraisal well is required in the southern part of the
accumulation to confirm the extent of the reservoir but, if successful, gross
recoverable resources are estimated to be around 190 Bcf from a two well
development including offshore CO2 removal. The upside case from a three well
development is around 280 Bcf gross recoverable resources.

The Kepler discovery was tested at 47 MMcfpd from two Carboniferous intervals by
well 43/20b-2 in 1988. Approximately 42% of the 47 Bcf gross recoverable
resources are estimated to lie in block 44/16c in which Venture will acquire a
35% interest. An FDP for Kepler as a tie-back to the nearby Cavendish platform
was submitted in 2004 but the development did not proceed due to CO2 handling
constraints. However, a joint development with Copernicus is under consideration
and it is envisaged that this could be brought onstream by 2011 assuming a
successful appraisal programme in 2008/9.


Garnet (Block 44/27a, Venture 31.66%)

Garnet was discovered in 1987 by the 44/27-1 well which tested gas from
Carboniferous sands. Venture will acquire a 31.66% interest in block 44/27a
which is estimated to contain around 84% of the 40 Bcf gross recoverable
resources. The original Garnet discovery well was tested at a low rate but it is
believed that this was due to formation damage rather than any reservoir effect.
There are a number of development concepts under consideration but the base case
at this stage is a single horizontal well tied back to the nearby Schooner
platform. Synergies may exist with the potential development of the Topaz
discovery to the south.


Opal (Block 43/25a, Venture 46.15%)

Opal is a 20 to 25 Bcf gross recoverable resource discovery lying to the west of
the producing Boulton B field. It was discovered by well 43/25a-2x in 2005 which
encountered a 120 foot gas column. Although there are a number of development
options under consideration, the base case development assumes an unmanned
platform tied back via the Rita field which is currently being developed as a
tie back to the Murdoch platform. Venture will acquire a 46.15% interest in the
Opal discovery as well as a 30% interest in the non-Opal area.


Boulton X and Y (Block 44/21e, Venture 100%)

Another development route for Opal could be opened up following exploration
success in block 44/21e which contains the Boulton X and Y exploration
prospects. These are stratigraphic plays similar to that seen in the producing
Boulton B field to the east and carry geological chances of success of 46% and
20% respectively with combined P50 resources of 23 Bcf. In the event of drilling
success, a joint development with Opal is possible. The block was awarded to
Tullow in April 2007 in the 24th Licensing Round and Venture will acquire its
100% interest in the acreage.

As part of this transaction, Venture is also acquiring Tullow's position in
blocks 48/3a and 48/4 which together contain the Morpheus exploration prospect.
A well is scheduled to be drilled on Morpheus toward the end of 2008. Combined
with its existing part carried interest, following acquisition of Tullow's
farmed-in interest Venture will be paying 41.335% of the well cost in return for
41% interest in the license.

Completion of the acquisition remains subject to customary partner and
regulatory approval.

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

"This substantial asset package represents a major step forward in the
development of Venture's southern North Sea gas position. As our latest 2008
acquisition it takes us into the Caister Murdoch System area, an important
region within the gas basin where, to date, we have not been represented. With
the forward curve for UK gas remaining firm we believe the base case development
of Cygnus to be a very solid proposition. In addition, the access to up to 1 Tcf
of recoverable resources and a range of other development opportunities makes
this a highly material acquisition. We are also excited by the opportunity to
increase our position in the Morpheus well which we acquired through the WHAM
acquisition last year."



Contact


Mike Wagstaff, Chief Executive
Rod Begbie, Corporate Development Director                      01224 619 000


Patrick Handley, Brunswick                                      0207 404 5959
John MacDonald, Weber Shandwick (Scottish Press)                01224 806 600






Notes to Editors:


CMS Interests


   * 266 Bcf (P50) recoverable resources close to existing infrastructure
   * six gas discoveries plus several appraisal and exploration opportunities
   * base case plans to develop an additional net 45 to 60 MMcfpd by 2012
   * full case potential of 100 MMcfpd net to Venture by 2015
   * significant upside potential from core Cygnus asset
   * FDP submission on Cygnus and Humphrey likely during 2008
   * appraisal upside in Copernicus


P1055  44/12a & 44/11a     Cygnus          35%     GDF     E.On, Endeavour
P1057      44/16a      Humphrey (part)     35%     GDF     E.On, ConocoPhillips
                         NW Humphrey
 P449      43/25a           Opal        46.15%     GDF     RWE
 P517      44/27a          Garnet       31.66%     GDF
P1057      44/16c          Kepler          35%     GDF     E.On, ConocoPhillips
P1057      44/16b        Copernicus        35%     GDF     E.On, ConocoPhillips
P1439      44/21e       Boulton X, Y      100%  Venture 1
P1245   48/3a & 48/4      Morpheus         25%  Venture 1  Ithaca, Dana

1 Assuming legal completion of the contemplated transaction and regulatory
approval



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

END
ACQZGGGDRZKGRZM

Venture Production (LSE:VPC)
Historical Stock Chart
From Jun 2024 to Jul 2024

Venture Production (LSE:VPC)
Historical Stock Chart
From Jul 2023 to Jul 2024