The chief executive of Venture Production said yesterday its strong results for the six months to June 30 and forward prospects reinforced the board’s recommendation to shareholders to reject Centrica’s hostile cash takeover bid.
Mike Wagstaff said: “While much of the attention this year has been on Venture as a takeover target we have demonstrated today that Venture is a great business, and that Centrica’s 845p-a-share offer significantly undervalues Venture.
“We are the only significant operator in the North Sea which has not cut activity and jobs this year, and believe there is still a lot to play for.
“We are the only top 10 gas producer with expectations of increasing output in the next three years. Everyone else is expected to see production decline.”
Mr Wagstaff added that successful hedging had seen the Aberdeen company’s average realised price for its output fall by just 6% in the first half of 2009 when world prices had fallen by 50%.
He said: “The first half of 2009 has seen strong performance across all areas of Venture’s business in a challenging corporate and operational environment.
“We have seen record production performance driven by the new fields which we brought on stream during 2008 combined with good reservoir and facilities performance and costs in line with expectations.
“Despite the fall in oil and gas prices we have experienced since mid-2008, our financial performance has benefited from our longstanding commodity hedging programme.
“Our 2009-10 drilling programme has got off to an excellent start with five out of seven wells drilled proving commercially successful and we have made significant progress in moving our key development projects forward.”
He added that over the next 12 months Venture had an active drilling programme with the potential to continue to add materially to its reserves. It also had a strong financial position giving it the ability to continue both to develop its own asset base and the flexibility to make further acquisitions.
The oil and gas operator said that it had a largely unused debt facility of £365million. It added that should majors choose to dispose of North Sea assets this would play to its strengths.
The company, with interests in 92 licence blocks in the UK and Dutch sectors of the North Sea containing 48 proven oil and gas fields, of which 21 are in production with five near-term developments progressing, reported production volume for the half-year up 16% on a year earlier to 52,988 barrels of oil equivalent per day.
It posted revenue up 14% to £274.7million although lower oil and gas prices cut pre-tax profits by 7% to £105.2million.
Centrica said last week that it already owned or had acceptances for its offer for about 40.8% of Venture shares and that its offer was being extended until Friday, August 28.
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