Venture Reports 'Outstanding' 2006

Venture Production plc on Tuesday issued its preliminary results for the year ended December 31, 2006.

"2006 was an outstanding year for Venture, both operationally and financially and we have continued to make excellent progress in increasing both production and reserves," said Mike Wagstaff, Chief Executive of Venture. "Venture reached an important milestone with our business generating cashflow significantly in excess of capital expenditures for the first time in its history. As a result, I am delighted to be able to announce today substantial inaugural dividend payments totaling 50p/share to reward shareholders for the progress in building Venture to this point, and to reflect the Board's confidence in the future growth of the business in 2007 and beyond.

"The extremely strong performance across all areas of our business during 2006 is a testament to the commitment and professionalism of the entire Venture team and marks a real coming of age for Venture as we reach our tenth anniversary since the Company was founded in 1997. Development activity is currently at record levels and we are on track to deliver our average production guidance of 47-51,000 boepd for 2007. Our development program is expected to sustain Venture's growth for the foreseeable future and we are on course to achieve our strategic goal of doubling the size of our business from 2005 levels over the 2006-8 period."

Operational Highlights

An outstanding year for delivery across the business:

  • Strong operational performance from all production hubs - ahead of expectations
  • Average annual production increased 50% to 44,706 boepd (2005: 29,864 boepd)
  • Two new fields on stream - Goosander and Rhea and seven additional 'in-field' development projects completed
  • Six acquisitions in 2006 adding 42.5 MMboe of proven and probable ("2P") reserves
  • 37% increase in year-end 2P reserves to 221.5 MMboe (2005: 164.4 MMboe), a reserves' replacement ratio of 455%

Strategic Highlights

New business initiatives building long-term growth:

  • Kittiwake export pipeline sanctioned and expected onstream during late 2007
  • Acquisition of CH4 Energy, our largest acquisition to date providing entry to the Dutch sector
  • Innovative financial partnerships put in place to pursue opportunities in the southern North Sea and infrastructure

Financial Highlights

Record financial performance:

  • Revenue up 120% to 360.3 million (2005: 164.1 million)
  • Profit before tax up 217% to 176.7 million (2005: 55.8 million)
  • Profit on ordinary activities after tax up 162% to 81.6 million (2005: 31.1 million)
  • Capital expenditure, including acquisitions, totaled 318.2 million (2005: 217.0 million)
  • Operating cashflow up 252% to 273.5 million (2005: 77.7 million) - free cashflow generative
  • Proposed inaugural dividends totaling 50p/share:
    --10p/share Ordinary Dividend for the year; and
    --40p/share Special Dividend

Venture is a British independent oil and gas company focused on the UK and Dutch sectors of the North Sea. Venture's strategy is to acquire and develop discovered but undeveloped reserves, collectively known as "stranded assets," and through operatorship to bring these reserves into optimal production.

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