VPC Venture Prod.

during 2004, was returned to production with minimal investment. The initial 
production performance has been encouraging at about 800 boepd net to Venture, 
with the field contributing 382 boepd toward our 2008 annualised production or 
0.9% of Group total production. The well performance will be evaluated to 
determine redevelopment options which include the potential drilling of a 
further appraisal well on the field. A subsea well to appraise the Halley 'Delta 
West' area of the field is planned to be drilled during the second half of 2009. 
 
 
In addition, Venture plans to drill an appraisal well on the Acorn oil discovery 
(Venture - 100% post withdrawal by other partners), during 2010. 
 
 
East Irish Sea ('EIS') 
 
 
During 2008, Venture established a larger position in the EIS and has moved the 
Marram appraisal (Venture - 60%) and Whitbeck exploration projects (Venture - 
70%) forward. We are scheduled to drill wells on both opportunities during 2009. 
 
 
Trinidad 
Venture retains a 40% shareholding in Ten Degrees North Energy Limited (TDN), an 
oil and gas production company based and registered in Trinidad. TDN produced an 
average of 1,320 boepd (528 boepd net) during 2008 (2007: 566 boepd) 
which represents 1.2% of total Group production. 
 
 
Corporate and Business Development 
 
 
2008 proved to be a very busy year for new business development. In total we 
completed 13 acquisitions and farm-ins which both increased our position in a 
number of existing assets and expanded Venture's business into several new areas 
including the CMS area, the EIS and the northern Dutch Sector. Importantly, we 
have been able to move forward rapidly the appraisal and development of a number 
of these assets post?acquisition. As a result of 2008 acquisition and farm-in 
activity we now have interests in 11 additional discoveries and three 
exploration prospects, the majority of which have wells scheduled in 2009 and 
2010. In addition, through the acquisition of the remaining 5% interest in Block 
49/4a that it did not own, Venture increased its interest in the producing 
Chiswick field to 100%. 
 
Discoveries 
 
 
During the year, we added interests in a wide range of already discovered oil 
and gas fields. 
 
 
In January 2008, Venture increased its working interest in the Bligh gas 
condensate discovery from 20.7% to 30.5% and took over operatorship. Recent 
detailed technical work has increased the expected recoverable volumes from the 
field and Venture is planning an appraisal well on the field. 
 
 
Also in January 2008, Venture reached agreement to farm-in to 60% of the Marram 
gas discovery in the EIS. Venture's equity will be earned when an appraisal well 
is drilled, expected to be in 2009. In October we subsequently increased our 
farmed-in interest to 70%. 
 
 
In March 2008, Venture acquired an estimated 58% operated interest in the F3-FA 
gas discovery for a royalty based consideration. The F3-FA acquisition marked 
our first expansion deal in the Dutch sector which was followed by the 
acquisition of interests in two additional discoveries in the northern part of 
the Dutch sector later in the year. 
 
 
April saw the announcement of the most significant acquisition of 2008 when we 
acquired a package of SNS interests containing six gas discoveries. The most 
important of these is the Cygnus field in blocks 44/11a and 44/12a which was 
discovered in 1998. The first of two initial appraisal wells was highly 
successful in establishing the reserves potential of a second fault block. A 
follow-on appraisal well is currently drilling into a third fault block with 
results expected during the second quarter of 2009. 
 
 
In addition to the Cygnus field, the April acquisition added five other gas 
discoveries to Venture's SNS portfolio and in October a further acquisition 
increased the working interest in four of these. This second transaction took 
our non-operated interest in Cygnus to 48.75%. 
 
 
The final new discoveries to be added came with the October acquisition of two 
fields in the northern part of the Dutch offshore sector. These two discoveries, 
A15a and B17a, are both potential tie-backs to nearby infrastructure where 
either new production has recently commenced or a change in operator has been 
announced. As such, they represent potential follow-on development projects for 
our Dutch team once the new F3-FA field has been brought into production. 
 
 
Exploration 
 
 
Throughout the year, we sought to expand our portfolio of low to medium risk 
exploration targets through a series of low cost farm-in deals and acquisitions, 
several from existing field partners whose investment priorities had changed. 
 
 
In January 2008, the Group completed a farm-in and equity swap in the Carna 
exploration prospect. Venture increased its equity interest in Carna from 40% to 
56% upon drilling of the exploration well. 
 
 
In March 2008, Venture acquired an interest in the low risk Whitbeck exploration 
prospect which lies close to the producing Bains field. Venture is planning to 
drill a well on this new EIS prospect during 2009. 
 
 
As a result of several transactions completed in March and December, Venture 
increased its interest in the Morpheus prospect and surrounding acreage to 100% 
ahead of drilling in late 2009 or 2010. 
 
25th Licensing Round 
 
 
Venture was very active in the 25th UK Seaward Licensing Round and the award of 
15 licence interests made it the most successful single applicant. In 12 of the 
licences awarded Venture will become the operator and it has already made firm 
commitments on two wells to be drilled by 2012, both of which will be targeting 
oil prospects. Four of the licences awarded already contain existing discoveries 
lying close to export infrastructure and across the new portfolio the Venture 
team see a mixture of oil and gas, different play types and extensive seismic 
re-processing opportunities. In addition, Venture is waiting to hear the result 
of its application for a further seven potential additional SNS licences that 
have been delayed pending further consideration of environmental issues. 
 
 
This highly successful participation in the latest licensing round is entirely 
in keeping with Venture's position as a leading North Sea development operator 
and the additional licence awards serve to deepen its already rich appraisal and 
exploration inventory. 
 
Board and Management 
 
 
In March 2008, we announced the appointment of Andrew Carr-Locke as a new 
independent Non-Executive Director. Andrew was formerly Group Finance Director 
of George Wimpey plc for six years until June 2007 when the Company merged with 
Taylor Woodrow. A Fellow of the Chartered Institute of Cost and Management 
Accountants, Andrew has extensive experience of working at a senior level in a 
number of high profile roles including Group Finance Director of Courtaulds 
Textiles plc, prior to which he was European Finance Director at United 
Distillers and Vintners. Andrew also serves on the Audit Committee. 
 
 
The Board also recently announced that Jon Murphy, Chief Operating Officer 
("COO"), has given notice of his resignation in order to develop his career 
outside the Group. It is planned that Jon will step down from the Board at the 
Annual General Meeting in May and will remain in employment with the Company 
until the end of the year. The Board is also very pleased to announce that, in a 
planned succession move, Jonathan Roger, currently General Manager Producing 
Assets, will replace Jon as COO and be appointed to the Board of Venture 
Production plc in May 2009. 
 
 
Since he joined Venture in March 1999, Jon has been a very important part of the 
Venture team that has built the Company from a virtual start-up operating 
onshore in Trinidad to one of the largest and most successful independent E&P 
companies in the North Sea. The Board would like to thank Jon for his huge 
contribution to our success over the last 10 years and wish him good luck in the 
future. 
 
 
Jonathan has 17 years experience in the oil and gas industry and a broad 
commercial and technical background. He joined Venture in 2003 and led the 
Company's SNS gas business, including expansion into the Dutch sector, following 
the acquisition of CH4. In late 2007, Jonathan's role was expanded to cover all 
of Venture's producing business units in the North Sea. 
 
Staff and Contractors 
 
 
2008 was another challenging year due to the scale and complexity of our 
development programme and the unanticipated challenges thrown up during the 
year. Once again, our people have excelled in delivering an extremely ambitious 
drilling and development programme while at the same time maintaining very high 
levels of operational, health, safety and environmental performance. The Board 
would like to thank all of our staff and contractors for rising to the 
challenges we faced and their critical contribution to our continued success. 
 
 
Capital Return Policy 
 
 
As an oil and gas production company, Venture is required to maintain high and 
sustained levels of capital reinvestment into its business. 2006 represented a 
turning point as Venture generated operating cash flow in excess of its 
development capital expenditures. As a result of its cash flow generation 
momentum and its long-term hedging policy, this situation continued in both 2007 
and 2008, despite the continuation of an active drilling and field development 
programme and fluctuating commodity prices. 
 
 
In utilising free cash flow generated by the business, the Board has determined 
the following priorities: firstly, re-investment back into its business through 
acquisitions or other internally generated investment opportunities; second, 
management of the Company's outstanding debt to sustainable long term levels and 
third, the return of capital to shareholders that is surplus to anticipated near 
term investment requirements. This will be achieved through dividends or other 
capital return mechanisms. 
 
 
In keeping with these priorities and in view of the business' performance during 

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