VPC Venture Prod.

| - Additions              |     86,938 |    168,240 |          433 |    255,611 | 
+--------------------------+------------+------------+--------------+------------+ 
| - Acquisitions           |          - |     47,944 |            - |     47,944 | 
+--------------------------+------------+------------+--------------+------------+ 
| - Disposals              |    (1,247) |    (3,017) |            - |    (4,264) | 
+--------------------------+------------+------------+--------------+------------+ 
| - Depreciation           |   (25,439) |   (56,685) |        (339) |   (82,463) | 
+--------------------------+------------+------------+--------------+------------+ 
| - Impairment of assets   |   (33,463) |          - |            - |   (33,463) | 
+--------------------------+------------+------------+--------------+------------+ 
| - Development costs      |          - |   (11,207) |            - |   (11,207) | 
| written off              |            |            |              |            | 
+--------------------------+------------+------------+--------------+------------+ 
| - Exploration costs      |   (18,144) |          - |            - |   (18,144) | 
| written off              |            |            |              |            | 
+--------------------------+------------+------------+--------------+------------+ 
|                          |      8,645 |    145,275 |           94 |    154,014 | 
+--------------------------+------------+------------+--------------+------------+ 
 
 
Secondary Segment - Geographic Segments 
 
 
All of the Group's activities are in the UK and Dutch sector of the North Sea, 
which is considered to be one geographic segment. 
 
 
3.     Operating Profit 
 
 
The following items have been charged/(credited) in arriving at operating 
profit: 
 
 
+----------------------------------------+-------+-------------+------------+ 
|                                        |       |        2008 |       2007 | 
+----------------------------------------+-------+-------------+------------+ 
|                                        |       |     GBP'000 |    GBP'000 | 
+----------------------------------------+-------+-------------+------------+ 
| Overlift                               |       |      13,187 |      2,848 | 
+----------------------------------------+-------+-------------+------------+ 
| Exploration costs written off          |       |           - |     18,144 | 
+----------------------------------------+-------+-------------+------------+ 
| Development costs written off          |       |           - |     11,207 | 
+----------------------------------------+-------+-------------+------------+ 
| Impairment of assets                   |       |       6,200 |     33,463 | 
+----------------------------------------+-------+-------------+------------+ 
| Depreciation, depletion and            |       |     105,965 |     82,463 | 
| amortisation (Note 10)                 |       |             |            | 
+----------------------------------------+-------+-------------+------------+ 
| Employee expenses (Note 28)            |       |      16,219 |     14,275 | 
+----------------------------------------+-------+-------------+------------+ 
| Share-based payments (Note 13)         |       |       3,928 |      4,981 | 
+----------------------------------------+-------+-------------+------------+ 
| Operating lease rentals:               |       |             |            | 
+----------------------------------------+-------+-------------+------------+ 
| - Land and buildings                   |       |         997 |        629 | 
+----------------------------------------+-------+-------------+------------+ 
| - Plant and machinery                  |       |       3,976 |          - | 
+----------------------------------------+-------+-------------+------------+ 
| Foreign currency loss/(gain)           |       |         491 |      (496) | 
+----------------------------------------+-------+-------------+------------+ 
 
 
The foreign currency loss within operating profit relates to the translation, at 
the closing rate, of monetary balances that relate to trading. 
 
 
A further impairment charge of GBP6,200,000 (2007: GBP24,500,000) has been made 
to Sycamore during 2008 in order to reduce the carrying value of the Sycamore 
field to its value in use, following the completion of technical work on the 
development during 2008. The pre-tax discount rate used for the calculation was 
16% (2007: 8% post tax). 
 
 
Included within overlift is a GBP16,300,000 non-cash charge relating to an 
adjustment to the historic overlift position on the Trees hub. 
 
 
Services Provided by the Group's Auditor and Network Firms 
 
 
During the year the Group obtained the following services from the Group's 
auditor at costs as detailed below: 
 
 
+--------------------------------------------+---+-------------+------------+ 
|                                            |   |        2008 |       2007 | 
+--------------------------------------------+---+-------------+------------+ 
|                                            |   |     GBP'000 |    GBP'000 | 
+--------------------------------------------+---+-------------+------------+ 
| Audit services:                            |   |             |            | 
+--------------------------------------------+---+-------------+------------+ 
| - fees payable to the Company auditor for  |   |             |            | 
| the audit of                               |   |             |            | 
+--------------------------------------------+---+-------------+------------+ 
|   parent company and consolidated accounts |   |         205 |        196 | 
+--------------------------------------------+---+-------------+------------+ 
| Non-audit services:                        |   |             |            | 
+--------------------------------------------+---+-------------+------------+ 
| - fees payable to the Company auditor for  |   |          91 |         82 | 
| the audit of                               |   |             |            | 
| Company subsidiaries pursuant to           |   |             |            | 
| legislation                                |   |             |            | 
+--------------------------------------------+---+-------------+------------+ 
| - other services pursuant to legislation   |   |          35 |         25 | 
+--------------------------------------------+---+-------------+------------+ 
| - tax services                             |   |           - |         18 | 
+--------------------------------------------+---+-------------+------------+ 
| - other services                           |   |          23 |          - | 
+--------------------------------------------+---+-------------+------------+ 
|                                            |   |         354 |        321 | 
+--------------------------------------------+---+-------------+------------+ 
 
 
4.     Gain on Disposal of Subsidiary 
 
 
There were no disposals of subsidiaries during 2008. In 2007, the sale of NSIP 
(ETS) Limited was completed on 22 January 2007. Details of the book values of 
the major classes of assets and liabilities of the Company measured at the date 
of disposal and of the consideration were as follows: 
 
 
+----------------------------------------+-------+-------------+------------+ 
|                                        |       |        2008 |       2007 | 
+----------------------------------------+-------+-------------+------------+ 
|                                        |       |     GBP'000 |    GBP'000 | 
+----------------------------------------+-------+-------------+------------+ 
| Property, plant and equipment          |       |           - |      1,891 | 
+----------------------------------------+-------+-------------+------------+ 
| Trade and other receivables            |       |           - |        440 | 
+----------------------------------------+-------+-------------+------------+ 
| Cash and cash equivalents              |       |           - |        582 | 
+----------------------------------------+-------+-------------+------------+ 
| Provisions                             |       |           - |      (782) | 
+----------------------------------------+-------+-------------+------------+ 
| Net assets disposed of                 |       |           - |      2,131 | 
+----------------------------------------+-------+-------------+------------+ 
| Consideration                          |       |             |            | 
+----------------------------------------+-------+-------------+------------+ 
| Cash                                   |       |           - |      2,382 | 
+----------------------------------------+-------+-------------+------------+ 
| Total consideration                    |       |           - |      2,382 | 
+----------------------------------------+-------+-------------+------------+ 
| Gain on disposal of NSIP (ETS) Limited |       |           - |        251 | 
+----------------------------------------+-------+-------------+------------+ 
 
 
The total consideration of GBP2,382,000 was satisfied by North Sea 
Infrastructure Partners Limited (NSIP) by way of cash. 
 
 
Reconciliation of Net Proceeds to Cash Inflow from Disposal of Subsidiary 
 
 
+----------------------------------------+-------+-------------+------------+ 
|                                        |       |        2008 |       2007 | 
+----------------------------------------+-------+-------------+------------+ 
|                                        |       |     GBP'000 |    GBP'000 | 
+----------------------------------------+-------+-------------+------------+ 
| Net cash consideration                 |       |           - |      2,382 | 
+----------------------------------------+-------+-------------+------------+ 
| Cash disposed of                       |       |           - |      (582) | 
+----------------------------------------+-------+-------------+------------+ 
| Cash inflow from disposal of           |       |           - |      1,800 | 

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