Venture Announces Private Placement of Convertible Bonds

Venture Production plc ('Venture'), the Aberdeen based UK independent oil and gas production company, today announces that it has raised £29 million through a private placement of convertible unsecured loan stock (the 'Bonds') due October 2010.

The Bonds will be issued at par by the Company and will carry a coupon of 4.25% payable semi-annually in arrears. The Bonds will be convertible into fully paid 0.4p ordinary shares at a conversion price of 474p/share, a premium of approximately 16% to yesterday's closing price and a premium of 37% over the closing price of the Company's ordinary shares one month ago. If not converted or previously redeemed the Bonds will be redeemed at 110% of par on or about 26th October, 2010 to give a total yield to maturity of 5.904%.

The Company intends to use the proceeds of the placing to fund the acquisition of interests in a number of undeveloped North Sea fields and discoveries. These include the package of interests to be acquired from Amerada Hess which was announced in May. The new issue will also provide funding for the development of other North Sea assets within the Company's portfolio.

The Bonds have been privately placed with a number of institutional investors and will not be listed.

Commenting on the news Mike Wagstaff, Chief Executive, said:

"Venture has a number of oil and gas development projects in the North Sea, which are currently at too early a stage for conventional bank debt financing. The convertible bond offering announced today will increase Venture's financing flexibility and strengthen our ability to first acquire and then rapidly develop 'stranded' undeveloped fields in the North Sea. We are currently focused on delivery of a major development programme through to the end of 2006 and the recently announced acquisition and the convertible bond placing will help Venture to sustain its growth beyond 2007".

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Notes to Editors

Venture announced the acquisition of interests in eight undeveloped oil and gas discoveries in the central North Sea and outer Moray Firth from Amerada Hess in May 2005 for a total initial cash consideration of $14.5 million
Including the recently announced Amerada Hess acquisition, Venture has interests in a total of 25 oil and gas fields in the North Sea. Of these:
- 10 are already in production; and
- 15 are short-to-medium term developments candidates of which three are scheduled to come on stream over the next 12 months.
Venture's 2004-6 development programme is on track to deliver average production from the UK of 45,000 boepd in the fourth quarter of 2005. This is expected to rise to 55-60,000 boepd by late 2006 or early 2007
Venture currently has three operated drilling rigs drilling development wells in the North Sea under long term contracts to continue drilling for the next 12-18 months