VPC Venture Prod.

As a result, pre-tax profit increased by 82% to GBP184.2 million (2007: GBP101.2 
million). Venture recorded a net profit after tax of GBP76.7 million (2007: 
GBP48.2 million). 
 
 
During 2008 Venture's cash flow from operating activities increased by 27% to 
GBP305.0 million (2007: GBP240.2 million). As in the previous two years, 
Venture's operating cash flow exceeded cash used in investing activities 
(excluding acquisitions). 
 
 
As a result of the major refinancing completed during 2007, Venture has a strong 
balance sheet with a year end cash balance of approximately GBP200 million and a 
substantially unutilised GBP365 million credit facility. This financial strength 
positions the Company well both to continue to invest in its own business and 
take advantage of corporate and asset acquisition opportunities. 
 
Operational Overview 
 
 
During 2008, Venture continued the development of its North Sea asset base, 
participating in the drilling of six new wells and bringing three new fields on 
stream, Chestnut, Stamford and Grouse. 
 
 
Average net daily production for 2008 was 45,006 boepd, an increase of 9% over 
2007. During 2008 we saw strong performance across all of Venture's production 
hubs. 
 
 
'A' Fields and UK SNS 
 
 
Venture's 'A' Fields gas production hub in the SNS continued to be our largest 
production contributor with annual average production of 16,413 boepd or 36.5% 
of total Group production (2007: 20,367 boepd or 49.4%). During the year, we 
again saw strong performance from both Annabel (Venture - 100%) and Saturn Unit 
(Venture - 22%) although average production volumes fell due to natural field 
decline. 
 
 
The Noble Julie Robertson ('NJR') jack-up drilling rig continued to operate for 
Venture in the SNS under a long term contract which will run until late 2010. 
 
 
2008 operated SNS drilling activity focused largely on appraisal activity. The 
Ensign appraisal well (Venture - 100%) was successfully completed and tested 
early in the year and since then we have been pushing forward development of the 
field. Unfortunately, commercial discussions with neighbouring infrastructure 
owners are progressing more slowly than anticipated. 
 
 
An extensive seismic re-interpretation of the entire 'A' Fields area has 
identified a number of attractive low risk step-out appraisal and exploration 
opportunities which Venture is planning to test over the next 18 months. During 
the first half of 2009, we are planning to drill an exploration well on the 
Andrea exploration prospect in Block 48/15b and an appraisal well on the Annabel 
East field extension. We are also planning to drill an exploration well in the 
Greater Adele area during 2010. In aggregate these wells could add several 
hundred billion cubic feet ('Bcf') of gas reserves lying close to Venture's 
existing production infrastructure, thereby enabling them to be rapidly 
developed. 
 
 
Also during 2008, Venture successfully drilled, tested and completed the 
Barbarossa (now renamed Ceres) appraisal well (Venture - 90%) at a flow rate of 
approximately 40 million cubic feet per day ("MMcfpd"), towards the top end of 
expectations. Ceres will be developed jointly with the adjacent Channon (now 
renamed Eris) gas discovery (Venture - 55.8%) made during 2007 as a sub-sea 
tieback to nearby infrastructure. We have now completed most of the subsea 
construction work for the fields and first gas is anticipated during late 2009. 
 
 
In 2008, Venture made two separate acquisitions of interests in a number of 
discoveries around the Caister Murdoch gathering system ('CMS') in Quad 44. The 
most significant of these discoveries is undoubtedly the large Cygnus discovery 
located in Blocks 44/11 and 44/12 (Venture - 48.75%). A two well appraisal 
programme commenced in late 2008 and is designed to firm up the long term 
development of the field, which is one of the largest undeveloped discoveries in 
the UK SNS. The first of these two wells was completed in February 2009 and 
delivered results in excess of expectations. The second Cygnus appraisal well is 
currently drilling. 
 
 
In late 2008, Venture commenced exploration drilling on the acreage acquired 
with WHAM Energy in 2007 with the drilling of the Carna exploration well in 
Block 42/21b. The well encountered a gas bearing carboniferous reservoir which 
is currently being production tested. Over the next 18 months we anticipate a 
more active exploration programme on this acreage with the drilling of up to 
three wells across the Alcyone, Andromeda and Morpheus prospects. 
 
 
Greater Markham Area ('GMA') 
 
 
The GMA production hub, which straddles the median line between the UK and Dutch 
sectors of the North Sea, contributed 12,711 boepd or 28.2% of Group total 
production (2007 - 4,506 boepd and 10.9%). This increase was the result of a 
full year's contribution from the Chiswick gas field (Venture - 100%) which came 
on stream during the fourth quarter of 2007. 
 
 
During the first half of 2008, Venture completed the first phase of the 
development of the Chiswick field with the drilling of the Chiswick Gamma 
production well. The well was drilled as a high angle hydraulically fractured 
well and was brought on stream during February. Since then the well's 
productivity and overall field performance has been better than anticipated, 
which, combined with a major subsurface study of the field has led to a 
significant increase in estimated recoverable reserves. 
 
 
In early 2009, Venture sanctioned the second phase of the Chiswick field 
development which will involve the drilling of up to five incremental production 
wells. The first two of these are scheduled to be drilled during late 2009 and 
the first half of 2010. 
 
 
During 2008, the development of the Stamford field (Venture - 100%) as a sub-sea 
satellite to the Venture operated Markham facilities was sanctioned. The 
Stamford production well was drilled during the third quarter and came on stream 
during December. While small, the Stamford project demonstrates Venture's 
ability to rapidly develop these types of opportunities. 
 
 
In late 2008, Venture commenced drilling an appraisal well on the Kew discovery 
located close to the Markham production facilities. Results from this well are 
expected in the next few weeks. 
 
 
In late 2008, Venture acquired operated interests in three undeveloped gas 
discoveries in Quadrants A, B and F in the northern part of the Dutch sector, 
thereby expanding Venture's footprint in the Netherlands offshore sector. The 
first of these discoveries, F3-FA (Venture - 58% estimated subject to 
unitisation), has moved rapidly towards development. The field development plan 
involves construction and installation of a self installed production platform 
('SIP') tied into the regional transportation facilities with first gas 
production expected during winter 2010/11. 
 
 
Greater Kittiwake Area ('GKA') 
 
 
The GKA production hub (Venture operated - 50%) contributed 7,902 boepd or 17.5% 
of Group total production during the period (2007 - 9,115 boepd and 22.1%). 
 
 
During 2008, overall production was in line with expectations and benefited from 
higher uptime performance as a result of the 2007 installation of the pipeline 
linking Kittiwake to the Forties Pipeline System. Continued strong performance 
from Goosander was offset by scaling issues on the Mallard production well which 
was shut-in for a significant part of the year pending a rig-based workover. The 
workover was successfully completed and production was restored during December. 
 
 
GKA development activity during the period has focused on the development of the 
Grouse field, on which a successful appraisal well was drilled during late 2007. 
Field development as a sub-sea tieback to Kittiwake was sanctioned during 2008 
and the field was brought on stream in late December. 
 
 
Longer term, with the acquisition of an additional interest and operatorship in 
the Bligh gas/condensate discovery (Venture - 31%), Venture is looking towards 
the appraisal and subsequent development of the Bligh and Christian fields 
located to the south east of the Kittiwake field. 
 
 
'Trees' 
 
 
During 2008, the 'Trees' production hub (Venture - 100%) produced at an average 
rate of 4,618 boepd or 10.3% of Group total production (2007 - 6,674 boepd and 
16.2%). 'Trees' production was steady and in line with expectations during the 
period and lower production volumes were the result of natural field decline. 
 
 
Activity on 'Trees' has focused on ongoing sub-surface work to refine our 
understanding of the Birch, Larch and Sycamore reservoirs and to identify 
additional investment opportunities. 
 
 
Other Central North Sea ('CNS') 
 
 
Development activity elsewhere in our CNS portfolio has focused on the hook-up 
and commissioning of the Chestnut field (Venture - 69.875%) and the field was 
successfully brought on stream in late September. Since start-up we have seen 
good reservoir and facilities performance with gross production rates in excess 
of 10,000 boepd. The field contributed 2,452 boepd of annualised average 
production or 5.4% of Group total production. 
 
 
As a result of ongoing sub-surface work on the Chestnut field, Venture 
identified the opportunity to drill an additional production well on the field 
to boost field recovery. This incremental project, known as Chestnut P2, was 
sanctioned during the first half of 2008 and the well was successfully drilled 
utilising the Noble Ton van Langeveld ('NTvL') semi-submersible drilling rig 
during the third quarter of 2008. Sub-sea tie in of the P2 development well was 
completed in February 2009 and the well is expected to be brought on stream 
shortly. As a result of good field performance and the results of the second 
production well, estimates of the field's recoverable reserves have increased 
materially. 
 
 
In August 2008, the previously shut-in Halley oil field (Venture - 40%) was 
restored to production on an extended well test basis. This field, which was 
originally developed using a well drilled from the Fulmar platform and shut-in 

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