Venture Raises Funds through Private Placement

Venture Production has raised £29 million through a private placement of convertible unsecured loan stock due October 2010.

The Bonds will be issued at par by the Company and will carry a coupon of 4.25% payable semi-annually in arrears. The Bonds will be convertible into fully paid 0.4p ordinary shares at a conversion price of 474p/share, a premium of approximately 16% to yesterday's closing price and a premium of 37% over the closing price of the Company's ordinary shares one month ago. If not converted or previously redeemed the Bonds will be redeemed at 110% of par on or about 26th October, 2010 to give a total yield to maturity of 5.904%.

The Company intends to use the proceeds of the placing to fund the acquisition of interests in a number of undeveloped North Sea fields and discoveries. These include the package of interests to be acquired from Amerada Hess which was announced in May. The new issue will also provide funding for the development of other North Sea assets within the Company's portfolio.

The Bonds have been privately placed with a number of institutional investors and will not be listed.

Commenting on the news Mike Wagstaff, Chief Executive, said:

"Venture has a number of oil and gas development projects in the North Sea, which are currently at too early a stage for conventional bank debt financing. The convertible bond offering announced today will increase Venture's financing flexibility and strengthen our ability to first acquire and then rapidly develop 'stranded' undeveloped fields in the North Sea. We are currently focused on delivery of a major development program through to the end of 2006 and the recently announced acquisition and the convertible bond placing will help Venture to sustain its growth beyond 2007".