Venture is a UK independent oil and gas company focused on the UK and Dutch sectors of the North Sea. Venture's strategy involves the acquisition and development of discovered but undeveloped reserves, collectively known as 'stranded' reserves and through operational excellence bringing these reserves into production.
Operational Highlights
• Strong operational performance from all production hubs - meeting expectations
• Average production down 3% to 42,160 boepd (first half 2006 - 43,572 boepd)
• Continuation of active drilling and development programme
• Chiswick gas field brought onstream in September adding just under 10,000 boepd and increasing current production rate by close to 20%.
Financial Highlights
• Financial performance driven by slightly lower production levels and lower realised UK gas prices
• Revenue down 16% to £155.0 million (2006 - £185.4 million)
• Pre-tax profit of £67.7 million (2006 - £97.7 million)
• Profit for the financial period of £33.2 million (2006 - £55.9 million)
• Operating cashflow £98.1 million (2006 - £155.5 million)
• Total capital expenditure (including acquisitions) of £71.8 million (2006 - £65.2 million) - 2007 investment is concentrated in second half
Corporate Development and Outlook
• Lower level of completed acquisitions in first half reflecting general market conditions
• New strategic investors - 3i and ArcLight invest over £200 million in Venture Debt refinancing - debt facilities expanded to £585 million
• Recommended offer for WHAM Energy announced - £14.2 million
• Outlook - first half performance means average production guidance for 2007 adjusted downwards by 4% to 44,000-46,000 boepd
Note: All comparatives are with the first half of 2006
Commenting on the results, Mike Wagstaff, Chief Executive of Venture said:
'The first half of 2007 saw Venture continue to deliver solid progress across its North Sea business with production continuing at high levels and overall operating performance in line with our expectations. However, financial performance suffered by comparison with the first half of last year, a period during which record high UK gas prices enhanced earnings. Countering this swing in market conditions, despite much lower gas prices this summer we saw significant benefits from our gas price hedging position.
We have continued to drive forward our key development projects, which remain on track, but due to their timing will make a limited contribution to 2007's average production levels. In particular, we are delighted to be able to announce today that we have brought the Chiswick gas field on stream. Not only is it expected to boost total Group production levels by close to 20% as we ramp up production from the field but successful completion of this project demonstrates Venture's ability to unlock difficult developments in mature basins such as the North Sea.
To date in 2007 we have made two acquisitions, which will continue to build our southern North Sea gas business. In anticipation of increased acquisition opportunities in the North Sea we have recently completed several financing transactions, which have raised £735 million in new capital, increased our financial flexibility and brought in two new strategic investors. Not only do we remain on track to meet our strategic objective of doubling the size of the business over the 2006-8 timeframe from 30-60,000 boepd but we have positioned Venture to continue that growth beyond these goals.'
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