Venture Restructures Audrey Gas Sales Arrangements

Venture Production has signed an agreement to restructure the gas sales arrangements with British Gas Trading, a subsidiary of Centrica plc, the buyer of gas production from the Audrey field. This will result in the termination of the current 'life of field' gas sales contracts with effect from April 1st.

Gas production from Audrey will continue to be sold to Centrica. Once the new arrangements take effect, a base volume of Audrey production will be sold under terms which correspond to those under the old 'life of field' contract. Venture will be able to sell additional volumes of the gas it produces from the 100% owned Audrey field at spot market related prices.

The new gas sales arrangement provides both the flexibility to optimize production from the field and an incentive to invest in rejuvenation and field life extension. Following its assessment of the field's potential, Venture's forward plan envisages several low risk workovers on Audrey production wells, together with in-fill drilling and the tie back of near field satellite discoveries of which the first is Annabel.

Commenting on the new agreement, Bruce Dingwall, Venture's Chief Executive said:

'The new gas sales arrangements for Audrey represent a true 'win-win' solution for both parties. Venture is positioned to release significant volumes of ' stranded' gas reserves in Audrey on attractive commercial terms. At the same time, we provide our gas buyer with continued price and volume security and the opportunity to share in some of the upside of future development activity.

'The renegotiation of the Audrey gas sales arrangements represent another important step in building Venture's 'A' Fields hub. Over the last three years we have built a significant North Sea gas business which is poised for rapid growth. We are well placed to benefit from the favorable supply-demand dynamics in the UK gas market which have resulted in improved gas pricing and which we anticipate to continue for the foreseeable future.'