Venture Production saw its share price rise again yesterday just a day after it soared more than 26.5% to 734p on news of British and Scottish gas owner Centrica paying almost £230million to buy a 22% stake in the Aberdeen-based oil and gas operator.
The Granite City company’s shares gained a further 2.86% yesterday to close at 755p as Venture and Centrica confirmed the latter had upped its stake to 23.6%, with the latest share price giving Venture a market value of more than £1.13billion.
Centrica said on Wednesday it was mulling a cash takeover offer for Venture, which responded immediately that a takeover move would require a much higher bid than the 725p a share at which Centrica acquired its initial stake
It added that this substantially undervalued the company, its prospects and strategic UK gas resources.
Also yesterday, Venture announced the successful tie-in of a second production well in the Chestnut oil field in the central North Sea.
Venture is the field operator and holds a 69.875% working interest in the part of block 22/2a containing the Chestnut field, which started production last September.
The company said the second production well had increased output from Chestnut to nearly 12,000 barrels of oil equivalent (boe) per day, net to Venture.
It also said that, as a result of strong well performance and updated reservoir modelling, the expected overall recovery from the field had increased by 2-5million boe net to Venture.
The company’s chief executive Mike Wagstaff 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.
“The robust field performance and additional reserves we have proved up validates our decision to develop Chestnut using the Hummingbird floating production vessel, the first deployment of a cylindrical floating production vessel in the UK offshore sector.”
The other Chestnut partners are: Bow Valley Petroleum UK (15.125%) and Atlantic Petroleum UK (15%). Venture acquired an initial 5% interest in Chestnut in 2001 and increased this to 69.875% through further acquisitions in 2002 and 2003.
Crude oil prices rose sharply yesterday on the back of a weaker dollar.
April crude in New York settled up $3.47 at $51.61 a barrel, the highest settlement since November 28, while May Brent in London rose $3.01 to $50.67 after earlier trading as high as $51.64.
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