Venture Production said yesterday an independent valuation of its assets gave its shares a minimum value of £10.66, well above British and Scottish Gas owner Centrica’s current offer of 845p a share to buy the company.
The assessment by Resource Investment Strategy Consultants (RISC) also gives Venture’s shares an upside value of £13.85.
The Aberdeen oil and gas company said yesterday it was posting an asset valuation circular to shareholders and advising them to reject Centrica’s offer.
Mike Wagstaff, chief executive of Venture, said: “RISC’s independent asset valuation clearly supports our view that Centrica’s offer does not fairly reflect the value of Venture’s reserves – let alone the significant going-concern value or the key strategic benefits that we believe Venture offers to Centrica.
“The upside valuation also underlines the significant additional potential available from Venture’s existing asset base. We have the financial strength and technical and operating expertise already in place to continue to unlock this upside.
“We continue to believe that Centrica’s offer is opportunistic, taking advantage of uncertainty and weakness in the equity and energy markets earlier in the year. These markets have now improved significantly.
“Since the date of Centrica’s offer announcement on July 10, the FTSE 100 Index has risen by 13.5% and the share prices of Venture’s UK exploration and production peers have risen by 17.2%, on average.
“Furthermore, since Centrica’s offer announcement, Brent oil forward prices for July 2011 have risen by 13.2% and gas prices for the 2011 calendar year have risen by 5.5%.
“With medium-term rising production, Venture is ideally positioned to benefit from these rising prices.”
Venture chairman John Morgan said: “The independent valuation clearly supports the board’s view that Centrica’s offer substantially undervalues Venture. Even the £10.66 per share base case is more than 25% higher than Centrica’s offer.
“My message to shareholders is do not sell your shares on the cheap to Centrica. Venture is worth substantially more than 845p per share.”
Venture shares closed last night at 836p, up 2p.