Ensign Gas Discovery Acquisition

Venture Production plc ('Venture' or 'the Company'), the Aberdeen based UK independent oil and gas production company, today announces that it has acquired 100% of the Ensign Discovery Area ('Ensign') through two separate transactions involving Shell U.K. Limited, Esso Exploration and Production UK Limited and Centrica Resources Limited, part of Centrica plc. Ensign is located in the UK Southern North Sea in Blocks 48/14 and 48/15a, immediately to the west of Venture's owned and operated 'A' Fields.

The Ensign discovery is one of the largest undeveloped gas accumulations in the Southern North Sea with an estimated gas volume in place of between 300 and 400 billion cubic feet ('Bcf'). The vast majority of the recoverable volumes are believed to lie within Block 48/14 with the remainder in Block 48/15a. Ensign was discovered in 1986 by well 48/14-2 which tested at 15 million standard cubic feet per day ('MMscfpd'). Using the Noble Julie Robertson rig, currently under contract to Venture through to early 2007, the Company plans to drill a horizontal appraisal well during 2006 to further test reservoir deliverability rates, ahead of committing to a development programme. Assuming a successful appraisal well, production from the discovery could be brought onto production during 2007 or 2008.

The total gross consideration comprises an initial £9,750,000 payable in cash upon completion plus an additional cash payment of £1,500,000 on approval of the Field Development Plan and a further £2,000,000 cash payment on commencement of production from the Ensign discovery. In addition, a total gross production royalty of 7.5% on the portion of production attributed to Block 48/14 will be paid to the Block 48/14 vendors, following economic payback from a successful field development.

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

"We are delighted to have acquired one of the largest undeveloped gas discoveries in the Southern North Sea and added further development inventory to our North Sea gas portfolio. This is a great example of operating companies working together to unlock the value of 'stranded' discoveries. With transaction activity stimulated by the DTI Fallow Process and our long-term rig contract allowing us to immediately add an appraisal well on Ensign into our 2006 drilling plans, we look forward to adding another near-term production stream. We will also have the opportunity to look at diversifying the export routes for our Southern North Sea production as there are a number of infrastructure options for Ensign gas in addition to the obvious route over the Venture operated Audrey infrastructure."

Enquiries

Notes to Editors

The Ensign discovery has estimated gas initially in place ('GIIP') of between 300 and 400 Bcf with an estimated recovery factor of 30-50%, based on the performance seen at analogous fields.
Venture expects to spud the Ensign appraisal well in 2006 with the Noble Julie Robertson rig.
The primary purpose of the appraisal well is to test well deliverability from a horizontal well to help determine the number of development wells required and hence optimal facility design ahead of field development commitment.
The transaction with Shell and Esso has been completed with Venture now 100% owner and operator of the 48/14 Ensign Discovery Area Block.
Upon completion of the Centrica transaction Venture will be 100% owner and operator of the 48/15a Ensign Discovery Area Block giving Venture 100% of the entire discovery.
The vast majority of GIIP is located in Block 48/14 with the remainder in Block 48/15a.
Venture have an ongoing and continuous Southern North Sea drilling programme with committed rigs into at least Q2 2007.
Near-term gas projects that Venture operate include the second well on the Annabel field, which been tested at over 50MMscfpd with an expectation of first gas during November 2005, and an infill well on the Ann field which is currently drilling.
Venture entered the Southern North Sea ('SNS') in 2001 through the acquisition of interests in the Audrey, Ann and Alison gas fields.
Venture has built its SNS business through serial acquisition, multiple major commercial transactions and a portfolio of development, appraisal and exploration wells within the 'A' Fields hub over the period 2001 - 2005.
Venture has interests in seven other discovered SNS gas fields:
- five in production (Audrey, Ann, Alison, Annabel and Saturn)
- two near term developments with the potential to be on stream by end 2006 (Mimas and Amanda)
- three further near term appraisal opportunities (Agatha, Adele and Channon)
- at the end of 2004, total net proved and probable gas reserves from these interest amounted to 254 Bcf
- in addition Amanda, Agatha, Adele and Channon account for a further 130 Bcf of additional possible net reserves
- this gas portfolio has the potential to deliver peak production of 200 MMscfpd in the 2006/7 timeframe.