Venture Announces First Transactions with North Sea Gas Partners

Venture Production plc ('Venture'), the Aberdeen headquartered UK independent oil and gas production company, today announces that it has entered into two deals with North Sea Gas Partners Ltd ('NSGP'). The first is the sale of a gross 75% stake in Venture's Ensign discovery to NSGP. The second is a farm-out of Venture's forthcoming Amanda appraisal and Agatha exploration wells.

Venture acquired 100% of the Ensign discovery in transactions with Shell, Esso and Centrica in 2005 and 2006. The sale to NSGP has been completed on the same financial terms as Venture acquired the interests in the field and will leave Venture with a 25% directly held stake in Ensign and an indirect holding of 25% through its 33.33% interest in NSGP. Venture will remain the operator of Ensign with an effective economic interest of 50%.

The Amanda appraisal well and Agatha exploration well (both in block 49/11b) will be drilled in 2007 by the Noble Julie Robertson jack-up drilling rig. NSGP will take a 50% stake in these assets in return for carrying the full well costs on both wells. Venture will remain operator of the assets and have a combined direct and indirect stake of 66.67% post the farm-out. The farm-out remains subject to customary partner and regulatory approvals and is expected to complete during the fourth quarter of 2006.

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

"We are delighted to have entered into these first transactions with North Sea Gas Partners. These deals allow us to retain exposure to material exploration and appraisal upside while reducing our overall portfolio risk and capital outlay. Partnering with NSGP allows us to retain operational control and enhance Venture's return on capital invested. The efficiency of these transactions reinforce our view that North Sea Gas Partners is an effective vehicle for future business development in the Southern North Sea."

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North Sea Gas Partners ('NSGP')

Venture announced the formation of the $300 million North Sea Gas Partners with a group of North American investors led by ArcLight Capital Partners on 18 April 2006.

Key features of NSGP are:

$300 million of commitments: $100 million from Venture with the balance from North American institutional investors.
A template Joint Operating Agreement has been agreed. Venture acts as operator of the jointly held assets in return for an ongoing management fee.
Once certain threshold returns are achieved by NSGP, Venture receives an enhanced proportion of the distributions from NSGP.

ArcLight Capital Partners ('ArcLight')

ArcLight Capital Partners is a leading private equity firm that invests exclusively in the energy sector. Founded in 2001, ArcLight has its headquarters in Boston, Massachusetts and an office in New York City. ArcLight has 21 investment professionals and is led by its founders Daniel R. Revers and Robb E. Turner. More information about ArcLight can be found at http://www.arclightcapital.com.

Ensign

Venture acquired a 100% interest in the Ensign fields through acquisitions from Shell, Esso and Centrica in 2005 and 2006. Consideration totalled £9.75 million on completion with a further £1.5 million on FDP approval and £2 million of first gas.
The Ensign discovery has gas initially in place ('GIIP') estimated to be between 300 and 400 Bcf with an anticipated recovery factor of 30-50%, based on the performance seen at analogous fields.
Venture expects to spud the Ensign appraisal well in late September 2006 with the Noble Julie Robertson rig.
The primary purpose of the appraisal well is to test well deliverability from a hydraulically fractured well to help determine the number of development wells required and hence optimal facility design ahead of field development commitment.
Upon completion of the NSGP transaction Venture will have a 25% directly held stake in the asset and be Operator. As Venture has a 33.33% stake in NSGP it will have a combined 50% direct and indirect interest in Ensign. Venture will report its indirectly held production and reserves in its consolidated figures.
The vast majority of GIIP is located in Block 48/14 with the remainder in Block 48/15a.

Amanda-Agatha

The Amanda discovery and Agatha prospect are located in block 49/11b.
The Venture operated Amanda discovery well (49/11a-9) was drilled and tested in 2003.
The Amanda appraisal well and Agatha exploration well is expected to be drilled by the Noble Julie Robertson in Q2 and Q3 2007 respectively following completion of the Ensign appraisal and Channon exploration wells.
As Venture has a 33.33% stake in NSGP it will have a combined 66.67% direct and indirect interest in Amanda and Agatha. Venture will report its indirectly held production and reserves in its consolidated figures.
The development concept envisages each subsea well being tied back to the Alison subsea manifold.

Venture Production plc

Aberdeen based, UK independent oil and gas producer, focused on the North Sea.
Listed on the London Stock Exchange with a market capitalisation of approximately £1.1 billion.
On 2 August 2006 Venture announced the acquisition of CH4 Energy Ltd from private equity and management shareholders for a combined cash and equity consideration totalling £154 million.
Net average production guidance for 2006 of 41,500 to 43,500 boepd (including contribution from acquisition of CH4 Energy Limited).
Proved and Probable Reserves of 161 MMboe (at 31 December 2005). The acquisition of CH4 Energy Ltd added 30.7 MMboe (at 30 June 2006).

Venture will announce its 2006 interim results on 19th September 2006.

Venture's 2005 Annual Report and Accounts may be downloaded from http://www.vpc.co.uk.