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Venture's Shares Dip After Production Targets Cut

Posted on: Saturday, 16 July 2005, 09:01 CDT

VENTURE Production suffered a 4 per cent knock to its share price yesterday as it cut back its production targets for the year, blaming operational delays and the recent disposal of its Trinidad assets.

The Aberdeen-based firm - which has been riding high on the back of strong oil and gas prices - said average output for 2005 would now be around 30,000 barrels a day, down from previous indications of 34,000.

Chief executive Mike Wagstaff was bullish on the downgrade, which is still almost double what Venture pumped during 2004. "I wouldn't call this a set-back," he said. "Every oil and gas firm has operational difficulties. Look at the cost over-runs announced by Shell this week, or BP's exploration project in the Gulf of Mexico."

Energy giant Shell revealed on Thursday that its North Pacific oil & gas project at Sakhalin Island would cost double the original budget at dollars 20 billion (GBP 11.4bn), while Hurricane Emily has caused BP's drilling platform to list alarmingly.

Wagstaff said 2,000 barrels had been cut from Venture's annual production forecasts due to the sale of the Trinidad assets, which were bought by former chief executive Bruce Dingwall for about GBP 18.5 million. Another 2,000 barrels could be subtracted due to delays related to one of the company's three key wells.

The company added that it had extended a key drilling contract into 2007. The lack of available rigs has been a huge barrier for firms attempting to start drilling in the North Sea, as there simply aren't enough to go round. Wagstaff said he did not expect the situation to improve in the next couple of years.

Venture's shares slumped 7 per cent in early trade, but recovered to close down 3.5 per cent or 15p at 306p. The company's stock has been storming ahead in recent weeks - rising from 250p in May and doubling since January. Some of the increase can be put down to takeover speculation, although a source said earlier in the week that word of an approach was "rubbish".

Source: Scotsman, The

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