Delays hit profits at Venture

Mar 18 2008

Oil & gas company Venture Production says problems are now behind them

Aberdeen oil and gas company Venture Production yesterday revealed its annual profits had been hit by production problems which it says are now largely behind it.

Profits fell from £176m to £101m with revenue slipping from £360m and £358m.

Chief executive Mike Wagstaff said 2007 was a year of contrasts for Venture during which strong underlying performance was impacted by a small number of delays on projects.

"As we go into 2008 these issues are now largely behind us and we have substantially reduced the risk on many of our core assets and development projects. In addition, the high prices currently being achieved for both oil and gas mean the company's cash flow generation is stronger than ever.

"In other respects, 2007 was an exciting year of operational and strategic progress for Venture and we successfully completed the largest and most complex engineering and field development projects ever undertaken by the company.

"We have also positioned the company to take advantage of its established North Sea position. We substantially strengthened our funding position and brought two new strategic investors into the company ahead of what we anticipate will be an increasingly active period of corporate expansion and industry consolidation.

"Already in 2008 we have seen increased acquisition activity in both the UK and the Dutch sectors. This, together with the strong current financial performance should make 2008 an exciting period in Venture's growth."

During 2007, Venture continued the development of its North Sea business, participating in the drilling of 11 new wells, and bringing two new fields on stream.

It said at the end of 2007 its net proven and probable reserves were estimated to total 203 million barrels of oil equivalent representing an 8.4 per cent fall from the end of 2006.

Wagstaff said it was is the first time in the company's history that annual production has not been replaced several times over.

"This pause in the growth of Venture's reserves base is principally the result of the 2007 re-categorisation of probable reserves from the Pilot field to contingent resources and also reflects the absence of any significant completed acquisitions during the year."

Average net daily production for 2007 was 41,228 barrels of oil equivalent per day , a decrease of 7.7 per cent over 2006.