+----------------------------------------------------+------------+---------+
| Number | 2008 | 2007 |
| | '000 | '000 |
+----------------------------------------------------+------------+---------+
| Authorised: | | |
+----------------------------------------------------+------------+---------+
| Ordinary shares of 0.4p each | 225,000 | 225,000 |
+----------------------------------------------------+------------+---------+
| Allotted, called up and fully paid: | | |
+----------------------------------------------------+------------+---------+
| Ordinary shares of 0.4p each | 149,770 | 143,216 |
+----------------------------------------------------+------------+---------+
| | | |
+----------------------------------------------------+------------+---------+
| | 2008 | 2007 |
+----------------------------------------------------+------------+---------+
| Value | GBP'000 | GBP'000 |
+----------------------------------------------------+------------+---------+
| Authorised: | | |
+----------------------------------------------------+------------+---------+
| Ordinary shares of 0.4p each | 900 | 900 |
+----------------------------------------------------+------------+---------+
| Allotted, called up and fully paid: | | |
+----------------------------------------------------+------------+---------+
| Ordinary shares of 0.4p each | 599 | 573 |
+----------------------------------------------------+------------+---------+
During the year, the Company issued 6,502,240 shares for the conversion of the
GBP29,000,000 4.25% convertible bonds and 51,805 shares to honour share options
exercised by employees.
24. Share Premium Account
+----------------------------------------------------+------------+---------+
| | Group | Company |
+----------------------------------------------------+------------+---------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------+------------+---------+
| At 1 January 2007 | 105,084 | 105,084 |
+----------------------------------------------------+------------+---------+
| On exercise of share options | 2,123 | 2,123 |
+----------------------------------------------------+------------+---------+
| At 1 January 2008 | 107,207 | 107,207 |
+----------------------------------------------------+------------+---------+
| On exercise of share options | 61 | 61 |
+----------------------------------------------------+------------+---------+
| On conversion of convertible bonds | 28,974 | 28,974 |
+----------------------------------------------------+------------+---------+
| At 31 December 2008 | 136,242 | 136,242 |
+----------------------------------------------------+------------+---------+
25. Retained Earnings
+----------------------------------------------------+------------+----------+
| | Group | Company |
+----------------------------------------------------+------------+----------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------+------------+----------+
| At 1 January 2007 | 113,135 | 13,337 |
+----------------------------------------------------+------------+----------+
| Transfer of treasury shares to EBT | 25,106 | 25,106 |
+----------------------------------------------------+------------+----------+
| Purchase of treasury shares | (15,817) | (15,817) |
+----------------------------------------------------+------------+----------+
| Loss on disposal of shares to satisfy share | (34,693) | (34,693) |
| schemes | | |
+----------------------------------------------------+------------+----------+
| Profit for the year | 48,175 | 105,527 |
+----------------------------------------------------+------------+----------+
| Dividends paid | (67,566) | (67,566) |
+----------------------------------------------------+------------+----------+
| At 1 January 2008 | 68,340 | 25,894 |
+----------------------------------------------------+------------+----------+
| Loss on disposal of shares to satisfy share | (1,324) | - |
| schemes | | |
+----------------------------------------------------+------------+----------+
| Profit for the year | 76,656 | 33,060 |
+----------------------------------------------------+------------+----------+
| Dividends paid | (17,201) | (17,201) |
+----------------------------------------------------+------------+----------+
| At 31 December 2008 | 126,471 | 41,753 |
+----------------------------------------------------+------------+----------+
The Group issued 414,519 shares in respect of the ADSBP share scheme from the
EBT at a loss of GBP1,324,000.
26. Other Reserves
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| Group | Convertible | Merger | Cash | Employee | EBT | Total |
| | loan | | flow | benefit | reserve | |
| | equity | reserve | reserve | reserve | | |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| At 1 January 2008 | 14,463 | 124,086 | (34,076) | 7,794 | (7,197) | 105,070 |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| Cash flow hedges: | | | | | | |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| -Fair | - | - | 30,078 | - | - | 30,078 |
| value | | | | | | |
| gains | | | | | | |
| net of | | | | | | |
| tax | | | | | | |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| -Reclassified | - | - | 24,637 | - | - | 24,637 |
| and reported | | | | | | |
| in net profit | | | | | | |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| Shares issued to | - | - | - | (1,417) | 2,741 | 1,324 |
| satisfy share | | | | | | |
| schemes | | | | | | |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| Credit relating to | - | - | - | 6,097 | - | 6,097 |
| share-based charges | | | | | | |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| Shares acquired by | - | - | - | - | (6,000) | (6,000) |
| EBT | | | | | | |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
| At 31 December 2008 | 14,463 | 124,086 | 20,639 | 12,474 | (10,456) | 161,206 |
+----------------------------+-------------+---------+---------------------+----------+----------+---------+
The cash flow reserve relates to the accounting for derivative financial
instruments under IAS 39. Fair value gains and losses in respect of effective
cash flow hedges are recognised in the cash flow reserve.
The employee benefit reserve comprises the credit entry relating to share-based
charges included in the income statement and calculated in accordance with IFRS
2.
The Company funds its offshore Employee Benefit Trust (EBT) with funds being
used to acquire shares which will be granted to certain employees under the
share option scheme. The cost of shares acquired by the EBT is recorded in the
EBT reserve. The excess of the exercise price and the nominal value of shares
issued under options is credited to the share premium account when such options
are exercised. Shares acquired by the EBT can either be allocated to the EBT by
the Company or purchased in the open market by the EBT. The costs of
administering the schemes are charged to the income statement in the period to
which they relate. The EBT has waived its rights to the receipt of dividends.
During the year, 414,519 (2007: 5,538,587) ordinary shares were disposed of by
the EBT to satisfy the award of shares under share schemes. During the year, the
Company transferred GBP6,000,000 to the EBT (2007: GBP7,920,000), which was used
to purchase 988,166 (2007: 1,108,557) ordinary shares in the market.
At 31 December 2008, the EBT held 1,698,766 ordinary shares (2007: 1,125,119),
which represented a market value of GBP7,220,000 (2007: GBP8,911,000) based on
the closing share price of GBP4.25 (2007: GBP7.92).
The merger reserve comprises the premium on shares issued as part of a business
combination.
The convertible loan equity balance of GBP14,463,000 represents the equity value
placed on the conversion option of the convertible bonds issued for
GBP151,000,000 on 16 August 2007 (Note 18).
+-------------------------------+-------------+---------+----------+----------+---------+
| Company | Convertible | Merger | Employee | EBT | Total |
| | loan | | benefit | reserve | |
| | equity | reserve | reserve | | |
+-------------------------------+-------------+---------+----------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------+-------------+---------+----------+----------+---------+
| At 1 January 2008 | 14,463 | 124,086 | 7,794 | (7,197) | 139,146 |
+-------------------------------+-------------+---------+----------+----------+---------+
| Shares acquired by EBT | - | - | - | (6,000) | (6,000) |
+-------------------------------+-------------+---------+----------+----------+---------+
| Shares issued to satisfy | - | - | - | 2,741 | 2,741 |
| share schemes | | | | | |
+-------------------------------+-------------+---------+----------+----------+---------+
| Transferred to subsidiary | - | - | (7,794) | - | (7,794) |
| entity | | | | | |
+-------------------------------+-------------+---------+----------+----------+---------+
| At 31 December 2008 | 14,463 | 124,086 | - | (10,456) | 128,093 |
+-------------------------------+-------------+---------+----------+----------+---------+
During the year, the employee benefit reserve has been transferred to Venture
Production (Services) Limited, a subsidiary company.
27. Cash Flow from Operating Activities
Reconciliation of operating profit to net cash inflow from operating activities:
+------------------------------------------------+-----------+------------+
| Group | 2008 | 2007 |
| | GBP'000 | GBP'000 |
+------------------------------------------------+-----------+------------+
| Operating profit | 231,074 | 116,639 |
+------------------------------------------------+-----------+------------+
| Depreciation charge | 105,965 | 82,463 |
+------------------------------------------------+-----------+------------+
| Share-based transactions | 3,928 | 4,981 |
+------------------------------------------------+-----------+------------+
| Exploration costs written off | - | 18,144 |
+------------------------------------------------+-----------+------------+
| Development costs written off | - | 11,207 |
+------------------------------------------------+-----------+------------+
| Impairment of assets | 6,200 | 33,463 |
+------------------------------------------------+-----------+------------+
| Gain on disposal of subsidiary | - | (251) |
+------------------------------------------------+-----------+------------+
| Changes in working capital: | | |
+------------------------------------------------+-----------+------------+
| - Inventories | (2,831) | 1,462 |
+------------------------------------------------+-----------+------------+
| - Trade and other receivables | (22,521) | (20,820) |
+------------------------------------------------+-----------+------------+
| - Trade and other payables | 28,963 | 16,322 |
+------------------------------------------------+-----------+------------+
| Operating cash flow | 350,778 | 263,610 |
+------------------------------------------------+-----------+------------+
+---------------------+-----------+----------+---------+-----------+-----------+
| Analysis of net | At 1 | Cash | Other | Exchange | At 31 |
| debt | January | flow | non | movements | December |
| | 2008 | GBP'000 | cash | GBP'000 | 2008 |
| | GBP'000 | | changes | | GBP'000 |
| | | | GBP'000 | | |
+---------------------+-----------+----------+---------+-----------+-----------+
| | | | | | |
+---------------------+-----------+----------+---------+-----------+-----------+
| Cash and cash | 158,445 | (22,113) | - | 62,620 | 198,952 |
| equivalents | | | | | |
+---------------------+-----------+----------+---------+-----------+-----------+
| Long term | (398,322) | - | 24,727 | (82,850) | (456,445) |
| borrowings | | | | | |
+---------------------+-----------+----------+---------+-----------+-----------+
| Net debt | (239,877) | (22,113) | 24,727 | (20,230) | (257,493) |
+---------------------+-----------+----------+---------+-----------+-----------+
+------------------------------------------------+-----------+------------+
| Company | 2008 | 2007 |
| | GBP'000 | GBP'000 |
+------------------------------------------------+-----------+------------+
| Operating loss | (3,996) | (8,663) |
+------------------------------------------------+-----------+------------+
| Depreciation charge | 85 | 339 |
+------------------------------------------------+-----------+------------+
| Share-based transactions | - | 4,981 |
+------------------------------------------------+-----------+------------+
| Changes in working capital: | | |
+------------------------------------------------+-----------+------------+
| - Trade and other receivables | (2,640) | 6,499 |
+------------------------------------------------+-----------+------------+
| - Trade and other payables | (10,609) | (15,952) |
+------------------------------------------------+-----------+------------+
| Operating cash outflow | (17,160) | (12,796) |
+------------------------------------------------+-----------+------------+
+---------------------+-----------+----------+---------+-----------+-----------+
| Analysis of net | At 1 | Cash | Other | Exchange | At 31 |
| debt | January | flow | non | movements | December |
| | 2008 | GBP'000 | cash | GBP'000 | 2008 |
| | GBP'000 | | changes | | GBP'000 |
| | | | GBP'000 | | |
+---------------------+-----------+----------+---------+-----------+-----------+
| | | | | | |
+---------------------+-----------+----------+---------+-----------+-----------+
| Cash and cash | 104,134 | 19,258 | - | 63,301 | 186,693 |
| equivalents | | | | | |
+---------------------+-----------+----------+---------+-----------+-----------+
| Long term | (398,322) | - | 24,727 | (82,850) | (456,445) |
| borrowings | | | | | |
+---------------------+-----------+----------+---------+-----------+-----------+
| Net debt | (294,188) | 19,258 | 24,727 | (19,549) | (269,752) |
+---------------------+-----------+----------+---------+-----------+-----------+
28. Employees and Directors
Employee benefit expenses during the year:
+----------------------------------------+-------+------------+------------+
| Group | | 2008 | 2007 |
| | | GBP'000 | GBP'000 |
+----------------------------------------+-------+------------+------------+
| Wages and salaries | | 13,233 | 11,767 |
+----------------------------------------+-------+------------+------------+
| Social security costs | | 1,809 | 1,539 |
+----------------------------------------+-------+------------+------------+
| Retirement benefit liabilities (Note | | 1,177 | 969 |
| 29) | | | |
+----------------------------------------+-------+------------+------------+
| | | 16,219 | 14,275 |
+----------------------------------------+-------+------------+------------+
The average number of employees during the year was:
+----------------------------------------+-------+------------+------------+
| Group | | 2008 | 2007 |
+----------------------------------------+-------+------------+------------+
| UK | | 118 | 108 |
+----------------------------------------+-------+------------+------------+
| Netherlands | | 38 | 35 |
+----------------------------------------+-------+------------+------------+
| | | 156 | 143 |
+----------------------------------------+-------+------------+------------+
Key Management Compensation:
+----------------------------------------+-------+------------+------------+
| Group | | 2008 | 2007 |
| | | GBP'000 | GBP'000 |
+----------------------------------------+-------+------------+------------+
| Salaries and short term employee | | 2,826 | 2,667 |
| benefits | | | |
+----------------------------------------+-------+------------+------------+
| Share-based payments | | 48 | 36 |
+----------------------------------------+-------+------------+------------+
| | | 2,874 | 2,703 |
+----------------------------------------+-------+------------+------------+
During the year, key management exercised share options of GBP21,000 (2007:
GBP16,771,000).
In 2008, GBP1,702,000 (2007: GBP2,452,000) relating to the bonus schemes (Note
13) was charged to the income statement.
The key management compensation figures above include Executive Directors.
Directors' Emoluments:
+----------------------------------------+-------+------------+------------+
| Group | | 2008 | 2007 |
| | | GBP'000 | GBP'000 |
+----------------------------------------+-------+------------+------------+
| Aggregate emoluments | | 2,608 | 2,484 |
+----------------------------------------+-------+------------+------------+
| Company contributions to defined | | 131 | 138 |
| contribution pension schemes | | | |
+----------------------------------------+-------+------------+------------+
| | | 2,739 | 2,622 |
+----------------------------------------+-------+------------+------------+
Further details of Directors' emoluments are provided in the Directors'
Remuneration Report.
29. Retirement Benefit Liabilities
The Group contributes to personal pension schemes on behalf of certain
employees. These schemes are administered independently of the Group. The total
pension cost which is charged against profit represents contributions payable by
the Group and amounted to GBP1,177,000 (2007: GBP969,000).
30. Operating Lease Commitments - Minimum Lease Payments
The Group has commitments under operating leases to make payments as set out
below:
+------------------------------------------------+------------+------------+
| | 2008 | 2007 |
| | GBP'000 | GBP'000 |
+------------------------------------------------+------------+------------+
| Plant and machinery and motor vehicles | | |
+------------------------------------------------+------------+------------+
| Within 1 year | 17,828 | 145 |
+------------------------------------------------+------------+------------+
| Within 2-5 years | 19,854 | - |
+------------------------------------------------+------------+------------+
| Land and buildings | | |
+------------------------------------------------+------------+------------+
| Within 1 year | 747 | 733 |
+------------------------------------------------+------------+------------+
| Within 2-5 years | 2,257 | 2,227 |
+------------------------------------------------+------------+------------+
| In more than 5 years | 3,603 | 3,603 |
+------------------------------------------------+------------+------------+
31. Capital Commitments
At 31 December 2008, the Group has commitments of GBP313,990,000 (2007:
GBP173,000,000) relating primarily to capital expenditure commitments on
drilling rigs.
32. Guarantees
The Group has provided credit guarantees totalling GBP31,319,000 and EUR5,200,000
(2007: GBP31,200,000 and EUR5,200,000) for decommissioning security for assets in
the North Sea.
33. Related Party Transactions
Group
Intra-group related party transactions, which are eliminated on consolidation,
are not required to be disclosed in accordance with IAS 24.
The financial statements include the financial statements of Venture Production
plc and the subsidiaries listed in Note 12.
The following table provides the total amount of transactions, which have been
entered into with related parties for the relevant financial year.
+-----------------------------+--------+-----------+-------------+---------+---------+
| Sales/purchases from | | Sales | Purchases | Amounts | Amounts |
| related | | to | from | owed by | owed to |
| | | related | related | related | related |
| | | parties | parties | parties | parties |
+-----------------------------+--------+-----------+-------------+---------+---------+
| party | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+--------+-----------+-------------+---------+---------+
| Associates: | | | | | |
+-----------------------------+--------+-----------+-------------+---------+---------+
| North Sea Infrastructure | 2008 | 11,351 | 25,705 | 55 | 2,379 |
| Partners Limited | 2007 | 68,130 | - | 3,498 | - |
+-----------------------------+--------+-----------+-------------+---------+---------+
+-----------------------------+--------+-------------------+------------------+
| Loans from/to related party | | Interest received | Amounts owed by |
| | | GBP'000 | related parties |
| | | | GBP'000 |
+-----------------------------+--------+-------------------+------------------+
| Associate: | | | |
+-----------------------------+--------+-------------------+------------------+
| Ten Degrees North Energy | 2008 | 292 | 292 |
| Limited | | | |
+-----------------------------+--------+-------------------+------------------+
| | 2007 | 281 | 281 |
+-----------------------------+--------+-------------------+------------------+
Associate
North Sea Infrastructure Partners Limited
Venture Infrastructure Limited has a 49.9% interest in North Sea Infrastructure
Partners Limited (2007: 49.9%).
Ten Degrees North Energy Limited
Venture Production plc owns 40% of the ordinary shares of Ten Degrees North
Energy Limited (2007: 40%).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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