Venture Production Posts Interim Results

Venture is a UK independent oil and gas company focused on the UK and Dutch sectors of the North Sea. Venture's strategy involves the acquisition and development of discovered but undeveloped reserves, collectively known as 'stranded' reserves and through operational excellence bringing these reserves into production.

Commenting on the results, Mike Wagstaff, Chief Executive of Venture said:

"The first half of 2007 saw Venture continue to deliver solid progress across its North Sea business with production continuing at high levels and overall operating performance in line with our expectations. However, financial performance suffered by comparison with the first half of last year, a period during which record high UK gas prices enhanced earnings. Countering this swing in market conditions, despite much lower gas prices this summer we saw significant benefits from our gas price hedging position.

We have continued to drive forward our key development projects, which remain on track, but due to their timing will make a limited contribution to 2007's average production levels. In particular, we are delighted to be able to announce today that we have brought the Chiswick gas field on stream. Not only is it expected to boost total Group production levels by close to 20% as we ramp up production from the field but successful completion of this project demonstrates Venture's ability to unlock difficult developments in mature basins such as the North Sea.

To date in 2007 we have made two acquisitions, which will continue to build our southern North Sea gas business. In anticipation of increased acquisition opportunities in the North Sea we have recently completed several financing transactions, which have raised £735 million in new capital, increased our financial flexibility and brought in two new strategic investors. Not only do we remain on track to meet our strategic objective of doubling the size of the business over the 2006-8 timeframe from 30-60,000 boepd but we have positioned Venture to continue that growth beyond these goals."

Operational Highlights

  • Strong operational performance from all production hubs - meeting expectations
  • Average production down 3% to 42,160 boepd (first half 2006 - 43,572 boepd)
  • Continuation of active drilling and development program
  • Chiswick gas field brought onstream in September adding just under 10,000 boepd and increasing current production rate by close to 20%.

Financial Highlights

  • Financial performance driven by slightly lower production levels and lower realised UK gas prices
  • Revenue down 16% to £155.0 million (2006 - £185.4 million)
  • Pre-tax profit of £67.7 million (2006 - £97.7 million)
  • Profit for the financial period of £33.2 million (2006 - £55.9 million)
  • Operating cashflow £98.1 million (2006 - £155.5 million)
  • Total capital expenditure (including acquisitions) of £71.8 million (2006 - £65.2 million) - 2007 investment is concentrated in second half

Corporate Development and Outlook

  • Lower level of completed acquisitions in first half reflecting general market conditions
  • New strategic investors - 3i and ArcLight invest over £200 million in Venture Debt refinancing - debt facilities expanded to £585 million
  • Recommended offer for WHAM Energy announced - £14.2 million
  • Outlook - first half performance means average production guidance for 2007 adjusted downwards by 4% to 44,000-46,000 boepd
  • Note: All comparatives are with the first half of 2006

    Chairman and Chief Executive's Statement

    The first half of 2007 saw Venture continue to deliver solid progress across its North Sea business. Production continued at high levels, albeit slightly lower than anticipated due, principally, to offshore operational issues beyond Venture's control and a delay in start-up of production from the Chiswick field. As announced separately today, first gas from Chiswick was successfully achieved in mid September. Despite these timing variances from plan we have continued to see strong reservoir and well performance across all of our production hubs.

    We have continued to make very good progress on key development projects, which, due to the growth of Venture's business are generally larger and more complex than in previous years. As anticipated at the start of the year, development activity in 2007 is concentrated during the second half and whilst our key projects remain on track for completion this year, they will make a limited contribution to 2007 average production levels. 2007 has also been characterised by higher levels of appraisal and exploration activity than in previous years. Overall, the results of this program have been less successful than we might have hoped, however, they are within the overall range of expectations and will contribute materially to the next generation of field development projects.

    From a corporate and business development perspective the first half of 2007 was less active than the corresponding period in 2006 due to the generally subdued state of the North Sea asset trading market. However, since late in the second quarter there has been a significant increase in activity though this has not yet been translated into completed transactions. Notwithstanding this, to date in 2007, Venture has announced two acquisitions including the recently announced recommended offer for WHAM Energy plc which will significantly increase our acreage position in the southern North Sea ('SNS'). In anticipation of the trend towards greater consolidation in the North Sea, Venture has both strengthened it financial flexibility and brought two new significant strategic investors into its business.

    Average daily production for the first half of the year decreased by 3% to 42,160 boepd (2006 - 43,572boepd), primarily due to unexpected operational issues. Revenue decreased by 16% to £155 million (2006 - £185.4 million) due to the slightly lower production volumes and significantly lower realised natural gas prices, reflecting the 60% fall in the average spot market price from the first half of 2006 to 2007. Financial performance and costs were in line with expectations and resulted in a pre-tax profit of £67.7 million (2006 - £97.7 million) and profit after tax of £33.2 million (2006 - £55.9 million). During the first half of the year, operating cashflow totalled £98.1 million (2006 - £155.5 million).

    Operational Highlights

    At June 30, 2007, Venture had interests in a total of over 40 oil and gas fields in the UK and Dutch sectors of the North Sea. Of these, 17 are in production, four are under near term development and the remainder medium term development candidates. These fields are located in four discrete production hubs; 'A' Fields and the Greater Markham Area ('GMA') in the SNS and 'Trees' and the Greater Kittiwake Area ('GKA') which are located in the central North Sea ('CNS').

    Group average net daily production including Trinidad for the first six months of 2007 was 42,160 boepd, a decrease of 3% over the comparable period last year. Strong field performance from Annabel, Saturn and Goosander was offset by higher than anticipated downtime on GKA, due to exceptionally poor weather offshore and a damaged tanker loading hose in April, a delay in the start-up of production from the Chiswick field and a later than anticipated onset of gas 'blow down' within the Birch oil field reservoir.

    During the first half of 2007, Venture continued its development program across its growing portfolio of assets. The Company participated in the drilling of nine wells and one new gas field, Mimas, was successfully brought on stream.

    'A' Fields

    Strong production performance has continued from Venture's SNS 'A' Fields gas production hub. During the first half of 2007 the 'A' Fields produced at an average rate of 21,564 boepd, or 51% of the Group total (2006 - 27,556 boepd and 63%). This decrease in production was due to natural decline, however, Annabel (Venture - 100%) and the Saturn Unit (Venture - 22%) both performed ahead of expectations.

    In June, the Mimas gas field (Venture - 15%) came onstream. Mimas has been developed as a satellite to Saturn utilising a single production well drilled from a minimum facilities platform.v During 2007, operated drilling activity in 'A' Fields utilizing the Noble Julie Robertson ('NJR') jack-up drilling rig has focused on appraisal and exploration activity. The Ensign appraisal well (Venture operated - net 50%), was completed. The well was successfully drilled, hydraulically fractured and tested at rates of 12-15 million standard cubic feet per day ('MMcfpd'). The future development plan for the field involves the drilling of a hydraulically fractured horizontal appraisal/production well this year, prior to commitment to the production platform and export pipeline. In September, Venture spudded this second Ensign appraisal/production well which is expected to be successfully completed towards the year end. This will enable Venture to sanction development of the Ensign Field with anticipated first gas production in late 2009.

    During the first half of 2007, Venture also sidetracked the Amanda discovery well originally drilled in 2003. The Amanda appraisal well (Venture operated - net 66.7%) has been drilled, completed and tested at rates of approximately 2 MMcfpd which is below expectations and is not economic on a stand-alone basis. Given the potential for a joint sub-sea development with Agatha the well is currently being suspended awaiting the results of the Agatha exploration well, which is expected to be drilled in 2008. Studies are also ongoing to evaluate the potential to improve well deliverability.

    The third 'A' Fields well drilled during 2007 was the Channon exploration well (Venture operated - 53%) which commenced drilling in early June and reached a total measured depth of 13,582 feet in late July. The well was designed to test two Rotliegend fault blocks extending across Blocks 47/3h and 47/8c and gas was discovered in both. The well has tested gas at stabilised rates up to a gross rate of 55 MMcfpd and has been suspended for future completion as a producer. Estimated net recoverable reserves from the Channon reservoir are 30 to 40 billion cubic feet ("Bcf") which is at the top end of pre-drill expectations.

    Discovery of gas at Channon creates the potential for a joint development with the Barbarossa gas discovery located in Block 47/9c (Venture operated - 90%). Venture will earn its 90% interest in Barbarossa once an appraisal/development well planned for late 2007 or early 2008 has been drilled. Expected reserves from this well are around 30 Bcf net to Venture and the most likely development plan is a sub-sea tie-back to nearby infrastructure.

    Greater Markham Area ('GMA')

    The GMA production hub, which straddles the median line between the UK and Dutch sectors of the North Sea contributed 3,370 boepd or 8% to Group total production during the period (2006 - zero) and tariff income of £2.1 million. During 2007, GMA development activity was focused on two key projects, the Markham compression tower ("CT") and the Chiswick field development. Installation and commissioning of the Markham CT was completed in early 2007 and has already resulted in an increase in production and improved operating performance. Markham field production performance during the period has been in line with expectations.

    The Chiswick Alpha long horizontal development well (Venture operated - 95.0%) was successfully drilled, completed and suspended pending hydraulic fracturing. The well encountered reservoir quality in line with expectations and the Noble Kolskaya jack-up drilling rig returned to the field in late June to drill Chiswick Gamma, the second development well and to facilitate the hydraulic fracturing of the Alpha well. The availability of a well stimulation vessel to perform the hydraulic fracture had initially proved to be a challenge due to the tightness of the supply market.

    However, the well has now been successfully fractured and completed utilising a pumping spread mounted on the deck of a large offshore supply vessel. This innovative project demonstrates Venture's operating expertise and ability to develop and successfully implement efficient solutions to the development challenges of the maturing North Sea. This solution will now be re-used on two further wells, the Ensign appraisal well and the Chiswick Gamma development well. As announced today, the first Chiswick well has now been cleaned up and tested at rates in excess of 50 MMcfpd and is expected to reach production rates of up to 60 MMcfpd following completion of the clean-up through the platform facilities.

    The Noble Kolskaya drilling rig has now partially drilled Chiswick Gamma, which was suspended to allow the rig to support the stimulation operations on the first Chiswick well. This second producing well is anticipated to be completed and onstream by February 2008.

    In the 24th UK Licensing Round, Venture was awarded 100% of Block 49/10c which contains the Stamford discovery, a near term development candidate as a tie-back to Markham.

    Greater Kittiwake Area ('GKA')

    The GKA production hub (Venture operated - 50%) contributed 8,685 boepd, or 21% of the Group total during the period (2006 - 5,387 boepd and 12.5%). This increase was driven by the contribution of Goosander for a full period and strong performance from Mallard. In particular, Goosander continues to significantly outperform expectations.

    Production from the GKA hub was adversely affected by poor uptime availability of the tanker loading and export system due to adverse weather conditions over the 2006/7 winter. The accidental damage to the tanker loading base in April further interrupted normal production, however, this was partially offset by continued strong reservoir performance, particularly from Goosander.

    During the first half of 2007 development activity on GKA has been focused on the installation and tie-in of a new export pipeline to the Forties system. The pipeline has now been successfully laid and tied-in and the project remains on schedule to be completed during the early part of the fourth quarter. The new pipeline is expected to substantially improve operational uptime, lower overall operating costs and allow GKA field life to be extended.

    In addition, Venture has recently spudded an appraisal well on the Grouse oil field, which if successful, is expected to lead to the field being developed as a sub-sea satellite to Kittiwake coming onstream in 2009. As a result of the strong reservoir and well performance of Goosander, Gadwall and Mallard, GKA productive well capacity is currently significantly greater than the platform processing and export capacity. During the first half of the year we initiated a study into the potential to expand processing and export capacity. In the 24th Licensing Round, Venture and its GKA partner Dana were awarded Block 21/17 containing the Wagtail and Whinchat discoveries.


    During the first half of 2006, the 'Trees' production hub (Venture - 100%) produced at an average rate of 8,000 boepd or 19% of total Group production (10,629 boepd and 24.5% during 2006). Trees production was steady during the period. However, we did not see an anticipated rise in overall production from the 'Trees' hub due to a delay in the onset of gas 'blowdown' within the Birch oil reservoir. This is anticipated as being due to a larger volume of oil in place within the reservoir thereby extending the time taken to depressurise it.

    An exploration well to test the Ash prospect (Venture - 100%) in the south of the 'Trees' block 16/12a was drilled as an extended reach well from the Tiffany platform. The well was spudded in late 2006 and reached total depth in March but did not encounter hydrocarbons.

    Other Central North Sea

    Development activity continued on the Chestnut field (Venture operated - 69.875%) during the first half of the year. Construction of the Sevan 300 floating production unit was completed during the first quarter of 2007 in China. The unit has since been shipped to Rotterdam for installation of the processing equipment and commissioning prior to tow out and installation in the field. The project remains on track for first oil production toward the end of the fourth quarter of 2007 or early 2008.

    Appraisal well results on the Pilot (Block 21/27a, Venture operated - 70.4%) and Narwhal (Block 28/2a, Venture operated - 100%) heavy oil discoveries have now been fully evaluated. Oil samples recovered from the Pilot well are somewhat heavier and more viscous than those from previously drilled Pilot wells and this new data will need to be incorporated into the viscosity model that had been developed. Further work will now be carried out to better determine the extent of the commercially recoverable oil. To the south of Pilot, the appraisal well drilled adjacent to the Narwhal discovery failed to encounter hydrocarbons and the well was plugged and abandoned.

    The appraisal well drilled on the Millburn (Block 22/22c, Venture operated - 70%) discovery encountered 12 feet of oil-bearing sandstone. However, this relatively low level of productive reservoir is considered sub-economic and the appraisal well has been plugged and abandoned.

    In June, an appraisal well was spudded on the Selkirk oil discovery (Block 22/ 21, Nexen operated - 31.5%). The well achieved its primary objective which was to identify the oil water contact within the reservoir and prove up a minimum economically developable field size. The well is currently being sidetracked up dip to a crestal location for completion as a future production well.

    Corporate and Business Development

    Over the last three years, Venture has focused on becoming a low-cost, efficient development and production operator and today, following a series of over 50 acquisitions, ranks as the sixth largest independent operator in the UK sector of the North Sea by gross operated production. In a mature basin such as the North Sea, Venture believes that its operating capability, size, scale and strategic and geographic focus give it a strong competitive position. In recent months, driven by the fundamentals in the global oil and gas industry, Venture has seen a significant increase in levels of asset trading activity in the UKCS compared to the last few years although this has yet to be translated into completed transactions. This activity is consistent with historical patterns seen in other mature basins such as the US Gulf of Mexico where, as the basin matures, ownership of substantial proportions of the basin's oil and gas reserves has migrated from larger international oil companies to more regionally focused independents.

    Venture believes that it is competitively and financially well positioned to capitalise on this consolidation trend, which it believes will create significant opportunities for the Company to expand its business.

    In July Venture announced that it has entered into agreements with 3i Group plc and its affiliates ("3i") and ArcLight Capital Partners, LLC and its co-investors ("ArcLight"), which deliver a significant strategic investment in Venture.

    In aggregate, 3i and ArcLight have made a total new investment of over £200 million in Venture. Combined with their existing interests, this new investment is intended to give each an approximately 9.9% stake in Venture. 3i and ArcLight's investments consist of a number of elements as follows:

  • £151 million in newly issued 3.25% convertible bonds ("CBs") due 2010. The CB's are convertible into newly issued Venture ordinary shares at a conversion price of £9.15/share. The CB's will be convertible into 16.5 million new shares equivalent to 11.6% of Venture's fully diluted share capital.
  • Conversion of ArcLight's existing North Sea Gas Partners ("NSGP") interest into new Venture ordinary shares. ArcLight converted its interest in North Sea Gas Partners into 6.03 million newly issued Venture ordinary shares at a price of 772p/share;
  • 3i's existing investment in Venture. 3i has an existing investment in Venture of 2.59 million shares, which was acquired in 2006; and
  • Additional market purchases. Both 3i and ArcLight have purchased additional Venture shares in the market with the intention of ltimately taking their stakes to approximately 9.9% each over a period of time.
  • As part of this strategic investment, provided that 3i and ArcLight achieve a minimum fully diluted interest of at least 9.0%, they will each be entitled to nominate a non-executive director to Venture's Board. As of 18 September, both 3i and ArcLight have achieved this minimum interest.

    As strategic long-term investors, both ArcLight and 3i have indicated in principle (subject to terms and their respective internal approvals) their commitment to provide further funding through additional future equity capital, if necessary alongside other sources of equity and debt capital, to help support Venture in its North Sea growth strategy.

    In late August Venture announced a £585 million refinancing of its debt facilities. This consists of two elements, a £350 million new corporate credit facility and a total of approximately £235 million in privately placed institutional loan notes with maturities of between 10 and 15 years. Combined with the strategic investment from 3i and ArcLight, Venture now has an extremely strong financial base from which to deliver its growth strategy.

    To date in 2007, Venture has announced two acquisitions. Firstly, in January Venture announced it had farmed into the Barbarossa gas discovery to acquire a 90% interest by funding the drilling of a well on the field. Barbarossa is adjacent to the recently announced Venture operated Channon gas discovery and it is intended that the two fields will be developed jointly.

    Secondly, in August, Venture announced an agreed offer to acquire the entire share capital of WHAM Energy plc ("WHAM"), an AIM listed UK independent with interests in a total of 23 blocks in the SNS. The consideration for the acquisition totals approximately £14.2 million in cash and newly issued Venture shares and the acquisition is scheduled to complete in November. WHAM has a broad portfolio of acreage in the SNS and significantly increases Venture's drilling inventory with some high potential opportunities.

    Board Development

    In May, it was announced that Marie-Louise Clayton, Venture's Finance Director, had given notice of her resignation in order to pursue her career outside the Group. We are in the process of recruiting her replacement and it is envisaged that she will leave by the end of 2007. Marie-Louise has made a substantial contribution to Venture since joining in February 2005 and has been an integral part of the Venture team, which has delivered real growth over that period. The Board wishes her every success in her future career.

    In June, Rod Begbie was appointed to the Board as Corporate Development Director, having previously been with Venture as Corporate Development Manager since August 2002. Over the five years that Rod has been with Venture he has made a very significant contribution to Venture's success and his appointment to the Board reflects the anticipated importance of corporate and business development to the next phase of Venture's growth.

    In conjunction with the strategic investments in Venture by 3i and ArcLight in August, we announced the appointment of two new non-executive directors representing 3i and ArcLight. Graeme Sword is a partner in 3i's Oil, Gas and Power business unit based in Aberdeen, and Robb Turner is a co-founder of ArcLight. Both Graeme and Robb bring many years of energy industry investment experience, which will be valuable as we continue to build Venture.

    Financial Highlights

    Revenue for the period was £155.0 million (2006 - £185.4 million), a reduction of £30.4 million. This is primarily due to the lower winter gas prices experienced in 2007, compared to the exceptional prices of the winter of 2006 and because of the 4% drop in UK production as a result of operational issues. Natural gas accounted for 54% of revenue and 60% of production at an effective realised price (ERP) of £18.17/boe (2006 - £26.02/boe). This is a reduction of 30% over the ERP achieved for the same period last year. The average spot gas market price for the first half of 2007 was 21p/therm which contrasts with 51p/ therm for the same period in 2006. Venture's results were improved by the beneficial gas hedges in place with 44% of gas sales hedged in the first half at an average of 47p/therm. Oil makes up the balance of the business revenues with an increase of 14% in the effective realised price to £30.75/boe (2006 - £27.01/ boe). The average hedge price for oil was $68/boe (£34.87/boe) and covered 54% of oil sales. This price was slightly lower than the average spot price for the first half. Overall hedging contributed £11.8 million to the first half revenues.

    Key Statistics                            First half 2007     First half 2006
                                                      (£/boe)             (£/boe)
    Effective Realised Price                            22.41               26.33
    Lifting Costs (excluding dry holes)                  5.45                4.20
    Depreciation, Depletion & Amortisation               5.06                5.36
    Administrative Expenses                              0.51                1.00
    UK Production (boepd)                              41,624              43,572

    Lifting costs have increased by 30% from the first half of 2006. Partly this is attributable to a larger number of workovers, £3.4 million (2006 - £1.2 million). Excluding workovers the lifting cost is £5.01/boe. This increase has been driven by the underlying cost escalation being seen across the industry and was noted in our guidance on lifting costs for the year of £5.30/boe. Venture has extracted from its lifting costs the cost of dry holes and reported this as a separate item in the Income Statement and will continue this practice going forward. This treatment gives visibility to a small but important area of Venture's business. Dry hole costs in the first half of 2007 were £3.3 million (2006 - nil) representing that part of the Ash well which cannot be re-utilized.

    On a unit basis depreciation, depletion and amortization has reduced slightly for the first half 2007 to £5.06/boe (2006 - £5.36/boe). This reduction reflects the mix of production and also the impact of the positive revisions to reserves at 2006 year end. For the second half we anticipate the production mix will move this charge towards the guidance level previously provided of £5.80/boe.

    The reduction in Administrative Expenses from £1.00/boe in the first half 2006 to £0.51/boe in 2007 reflects the reversal of a provision in relation to the 2003 LTIP and timing differences that will reverse in the second half. Operating profit for the period was £70.6 million (2006 - £101.2 million). This reflects poor first half gas prices and the drop in production.

    As a result of Venture's positive cash position interest income of £1.2 million has been generated (2006 - £0.8 million). Finance expenses were in line with expectations at £5.5 million (2006 - £4.7 million).

    Profit before taxation for the first half of the year was £67.7 million (2006 - £97.7 million) with a tax charge of 51% (2006 - 43%). The increase in tax from 2006 reflects the increase in the Supplementary charge rate from 10% to 20%. It should be noted that Venture continues to be non-tax paying and currently does not anticipate paying cash taxes until 2008. However, Venture elected to pay £15.8 million cash taxes in January 2007 to take advantage of the ability to offset 2005 Capital Allowances against the newly introduced higher tax rate for 2006 - thus achieving an overall tax benefit of £2.0 million.

    Profit after taxation for the first 6 months of 2007 was £33.2 million (2006 - £55.9 million). This resulted in fully diluted earnings per share of 24.3p (2006 - 41.8p).

    The Group had tangible fixed assets of £703.6 million (2006 - £469.5 million) reflecting continuing field development activity over this period. Intangible assets relates to the Goodwill on the acquisition of CH4. Trade creditors are significantly higher than in the previous periods reflecting the accrued dividend payment of £67.9 million (2006 - nil) paid in July. Kittiwake inventory at June 30, 2007 was 310,856 boe.

    The Group's net debt position at June 30, 2007 was £201.5 million, an increase of £14.7 million from 2006 year end. Venture's net hedging position for the second half continues to be a net asset. The net derivative asset of £8.9 million shown in the Balance Sheet relates to gas hedges of £10.4 million asset, oil hedges of £5.2 million liability and FX/interest swaps of £3.7 million asset.

    Net cash generated from operating activities was £73.2 million (2006 - £149.4 million). This was substantially utilized by Capital expenditure of £71.8 million (2006 - £65.2 million). The Group continued to acquire treasury shares in the first half to meet the 2003 LTIP share obligations, which vested in April 2007. In addition £6.1 million was paid to the Employee Benefit Trust for future share requirements, giving a total of share related payments of £21.9 million (2006 - £16.3 million). In accordance with the dividend policy outlined in 2006 there will be no interim dividend declared.

    On 29 August the Group's borrowing facility was replaced by a combination of medium-term corporate debt of £350 million and a private notes placement of US$484 million and £25 million. These new facilities, combined with the £151 million convertible loan notes issued to 3i and Arclight put Venture's Balance Sheet into an excellent position to finance further growth.

    Outlook and Summary

    The first half of 2007 has delivered solid results with underlying operating performance in line with expectations. However, in comparison with 2006 the profitability of our business was impacted by the weak spot market for UK natural gas, which has now considerably improved. This combined with record oil prices, increased production and uptime should lead to an improved second half and full year results.

    Other operational guidance remains in place for 2007 as we progress through the second half of the year. Dry hole costs for Narwhal and Millburn (approximately £16.0 million) will be incorporated into the accounts for the full year.

    During the first half of 2007, the benefit of Venture's strong underlying reservoir performance was limited by operational events largely beyond the Company's control. However, the last few months have seen a period of strong production performance and facilities uptime with production currently running at approximately 50,000 boepd. With the addition of substantial new production from Chiswick in the fourth quarter, we expect to exit 2007 with production rates of approximately 60,000 boepd. However, some additional slippage in start-up of Chiswick and unanticipated downtime on GKA over the summer have caused us to revise downwards our guidance for average Group production slightly for full year 2007 to between 44,000 and 46,000 boepd.

    As anticipated, 2007 has been a year of solid progress in developing our business, which is expected to continue through the remainder of the year and beyond. With a broad and diversified asset base, an exciting development program and favorable commodity price environment, we remain confident of the outlook for Venture's business. Not only do we remain on track to meet our strategic objective of doubling the size of Venture's business over the 2006-8 timeframe from 30,000 boepd to 60,000 boepd around average production, but we have positioned Venture to continue that growth beyond this.