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Venture Production

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734.00 +154.00 (26.55%)


Been in a strong uptrend, another solid looking UK oil company that is a takeover target.




VENTURE Production, one of the largest North Sea oil companies, has revealed an 81 per cent surge in profits for 2008, and vowed to continue to increase investment despite the slump in crude prices.


The Aberdeen-based group, which has grown by exploiting undeveloped oil and gas reserves, disclosed yesterday that it made a pre-tax profit of £184.2 million in 2008, despite production increasing by just 9 per cent over the previous year.


Although crude prices have slumped from the record of close to $150 a barrel hit last July to less than $50, Venture yesterday pledged to step up spending levels to maintain momentum at the company.


Mike Wagstaff, the former investment banker who heads the FTSE 250 firm, promised to spend a record £300m developing Venture's asset base this year, and indicated the group's hunt for acquisitions continued.


He said: "Already in the first quarter we've looked at more (assets] than we did in the whole of the first half of last year. There's a lot more becoming available."




Possible takeover target.


Centrica announces it has bought a 22 percent stake in oil and gas firm Venture Production and is considering making a cash offer for the company, it said on Wednesday. Centrica, the owner of British Gas, said it acquired 33 million shares for 725 pence each, or 239 million pounds ($335 million) in total, valuing Aberdeen-based Venture at 1.09 billion in total. Venture's shares closed Tuesday at 580 pence. "Centrica is considering its options in relation to Venture, which could include making a possible cash offer," it said in a statement. Venture urged its shareholders to take no action. "Venture believes that this substantially undervalues the company, its prospects and strategic position particularly with regard to its UK gas resources." Numis Securities said in a note: "The premium paid reflects Centrica's desire to gain access to a non-operated UK gas resource and the company's lower cost of capital." It added that Centrica has paid significant premiums for UK gas assets in the past. In January, Venture said it had not received any offer approaches after its shares jumped on speculation that Centrica had acquired a stake and was mulling a bid.



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Let's see what comes of this and the effect on the share price.


March 18 (Bloomberg) -- Centrica Plc, the U.K.’s biggest energy supplier, bought 22 percent of Venture Production Plc for 239.4 million pounds ($332 million) and said it may make a cash offer for the rest of the North Sea oil and gas explorer.


“There can be no certainty that an offer will ultimately be made,” the Windsor, England-based company said today in a statement. Venture, which surged a record 27 percent today after Centrica bought shares at 725 pence apiece, said the price paid for the stake undervalues the whole company.


Centrica is adding production to cut reliance on traded markets for supplies because it has underperformed competitors when prices are high. Chief Executive Officer Sam Laidlaw is in talks on buying 25 percent of nuclear utility British Energy from Electricite de France SA for about 3.1 billion pounds and said Feb. 26 the company has the “fire power” for more assets.


“The potential acquisition of Venture Production would be additional to, rather than instead of, the 25 percent British Energy purchase,” Angelos Anastasiou, an analyst at Pali International, said in a note to investors today. He has a “buy” rating on Centrica.



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Venture Production well set for 2009


Numis anticipates 2009 EPS of 39.5p per share (2008: 50.5p). The company's shares continue to trade at a significant discount to many, but not all, brokers' net present value (NPV) calculations, which is a key attraction. For example, Oriel currently calculates NPV at 736p per share and Evolution at as much as 1,320p, but strong gains in the share price from around 425p at the start of the year have taken the stock above Numis' 480p NPV.



Does have net debt at 61%.

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787.50 +32.50 (4.3%)


Aberdeen based oil and gas firm Venture Production hailed ‘another excellent drilling result’ as it published test drilling results from its Carna gas property. Well log data indicates a gas column in excess of 1490 feet TVD (true vertical depth) and net pay of 127 feet TVD, which bodes well for the prospects of five follow-on prospects in the Greater Carna Area.


Digital Look Market Close Report.

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March 19, 2009


While no formal takeover has yet been launched, all the signs are that Centrica, barring a countermove by a rival bidder, is determined to gain control of Venture. At 725p per share, the stake purchase yesterday represented a 25 per cent premium to the prevailing share price. But it still looks cheap. At that price, Centrica would be acquiring Venture’s reserves at less than $9 a barrel.



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Did you also notice Bowleven. Two in the same day.

Bowleven seems to have had its moment for now.


The big disapointment on the day was Bowleven (BLVN) shares in which plunged 26.75p to 85.5p. 10 days ago the company said that it had received a bid approach at 150p per share. The bidder has done some due diligence and done its sums and come back with a 100p offer and that news - which the board is considering - prompted the shares to dive as various spivs around the City wre forced to make a quick exit.


UK Analyst Market Report.

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Bowleven seems to have had its moment for now.


Most unfortunate for those who bought when news broke, did they show a weak hand? See they have knocked the prospective offer down from 150p to 100p and YET they STILL want the company.

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Bid target Venture Production (VPC) reported an excellent start to 2009 across all areas of its business and said it remains confident going forward. As at 1 April, average production for the year to date has been about 51,300 barrels of oil equivalent per day (boepd), around 15% higher than the same period last year. The Aberdeen-based oil and gas production firm said key contributors to production growth are the Chestnut, Grouse and Stamford fields in the North Sea, which were brought into production in the second half of 2008. The group said its balance sheet remains strong, with a current cash and cash equivalents balance of about 275 million dollars and a fully committed 365 million pound five year syndicated corporate bank facility, which is undrawn other than letters of credit. "Whilst short term gas prices have weakened somewhat as we enter the summer gas season, prices for winter 2009/2010 and beyond remain strong," said the group. "Venture is continuing to benefit from the cash flow generation from its growing production base, underpinned by a commodity hedging position that protects a material proportion of the near-term production, and with strong financial resources the board remains confident in the outlook for Venture's business," it added. Shares in the firm ventured 20p higher to 819p.


UK Analyst Market Report

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