Uchenna Izundu
OGJ International Editor
LONDON, Mar. 23 -- Centrica Resources (UK) Ltd. has paid £239.4 million for a 22% stake of Venture Production PLC, Aberdeen, indicating increased consolidation in the British oil and gas business.
Through its broker, Goldman Sachs International, Centrica said it might acquire additional shares of Venture. Centrica's total stake in the company has risen to 22.3%, and it said it was considering making a cash offer for the company.
"There can be no certainty that an offer will ultimately be made by Centrica for Venture," Centrica added. Venture is estimated to be worth £1.2 billion.
Venture branded Centrica's move as "highly opportunistic" amid the market turmoil, adding that it "substantially undervalued" the company, which is carrying out drilling and development programs.
By the end of 2008, Venture's operating profits doubled to £231.1 million after greater volumes and commodity prices lifted revenues by 38%. Production is expected to start in three new fields in the second half of the year.
The company has tied in its second production well to subsea infrastructure on its operated Chestnut field in the UK Central North Sea. This brings production to just under 12,000 boe/d net to Venture. Using "updated reservoir modeling, the expected overall recovery from the field has increased by…2-5 million boe, net to Venture," the company said.
Chestnut came on stream last September with one initial production well tied in to the Hummingbird floating production, storage, and offloading vessel, the first deployment of a cylindrical FPSO off the UK.
Mike Wagstaff, chief executive of Venture, said: "Chestnut was already delivering at the upper end of our expectations and successfully adding this second well has confirmed the field as an important contributor to our overall production. We have sanctioned, drilled and brought this second well on stream in less than 10 months, which is a reflection of our subsurface team's innovative use of leading edge seismic techniques to identify further infill well opportunities."
Contact Uchenna Izundu at [email protected].
