The consideration comprises a cash payment of $14.75 million upon completion plus additional payments of (1) $1.75 million upon receipt of the first field development approval on any of the acquired assets and (2) $2.5 million when first commercial oil is achieved from the first of the acquired assets to achieve production.
The CNS package of discoveries consists of four main asset clusters:
In addition, a non-operated interest in the West Wick discovery in the Inner Moray Firth to the west of the producing Captain field will also be acquired.
Although a significant amount of work and capital investment is required to generate and refine the various development plans needed to bring the assets on-stream, Venture estimates that over the next two to three years the acquired assets could yield net additional reserves of between 50 and 60 million barrels of oil equivalent ("mmboe") with a 75:25 oil:gas split. The average initial net P50 incremental production rate for each near-term development is of the order of 3,000 to 4,000 barrels of oil per day ("bopd") and the potential total additional production from the package is 20,000 to 30,000 bopd (net to Venture) by the 2008 to 2009 timeframe.
Work will begin immediately to progress toward full Field Development Plan status on several of the acquired interests where Venture anticipates becoming operator following legal completion. Completion remains subject to regulatory and customary DTI and partner approvals.
Commenting on the news, Mike Wagstaff, Chief Executive said:
"Adding the fresh development inventory announced today is exactly in line with Venture's growth strategy. We are currently focused on delivering a series of major development projects over the 2005-7 timeframe and the Hess package adds significantly to the next wave of future developments. Whilst understandably non-core to the current owner, applying Venture's business model and focus to this bundle of oil discoveries will help us continue pushing peak production from our asset base higher and further out in time."
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