As a result of the increase in its 'A' Fields interests, Venture's net production in the fourth quarter of 2003 is expected to rise by an average of 15.0 million cubic feet of gas ('MMcf') or 2,500 barrels of oil equivalent per day ('boepd').
The total consideration will be £6.6 million payable in cash, with an adjustment for working capital and net cashflow from the field in the period after the effective date of 1st July 2003. In addition, a deferred consideration of £0.7 million will be paid on first gas for sale from the Annie and Agatha satellites. Venture plans to start drilling the first of these step-out wells in the fourth quarter of 2003. The acquisition, which is expected to complete by the fourth quarter, will add incremental proven and probable ('2P') reserves of 16.8 billion cubic feet ('Bcf') or 2.8 million boe net to Venture.
The purchase of these interests from First Oil represents the fourth North Sea acquisition Venture has announced in 2003. Following completion of this latest transaction Venture's pro-forma 2P reserves will be 75.9 million boe, an increase of 26.2 million boe or 53% since December 31, 2002.
Further, the Company is pleased to confirm that, jointly with Dana Petroleum, it has been awarded the licences to develop four blocks adjacent to the Greater Kittiwake Area ('GKA'). These blocks contain a number of undeveloped discoveries and Venture will become operator of the entire GKA area upon completion of the acquisition from Shell and ExxonMobil. This is expected in the fourth quarter.
Commenting on the news, Bruce Dingwall, Chief Executive, Venture Production said: 'Today's acquisition further diversifies our asset portfolio and is another natural step for the company. Venture's strategy from day one has been to build significant working interests in assets that we can operate. Having first bought into the 'A' Fields in November 2000, we know them very well and we now have a significant grouping of under-exploited gas assets to get to work on. The incremental volumes from the existing producing fields, together with the satellite reserves to be accessed through step-out drilling, will be a major component of Venture's growth over the next several years. In addition, the fresh acreage around the Kittiwake platform gives us greater potential upside from the GKA acquisition we announced in April.'
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