4th Aug 2009 15:57
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. |
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4 August 2009 |
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FOR IMMEDIATE RELEASE |
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The Board of Venture Production plc ('Venture') announces that it is today posting a circular to shareholders ('Circular'), which contains an independent valuation of Venture's assets by Resource Investment Strategy Consultants ('RISC').
Mike Wagstaff, Chief Executive of Venture said:
"RISC's independent asset valuation, which is equivalent to a base case value of 1,066p per share and an upside value of 1,385p per share, clearly supports our view that Centrica's Offer does not fairly reflect the value of Venture's reserves - let alone the significant going concern value or the key strategic benefits that we believe Venture offers to Centrica.
The upside valuation also underlines the significant additional potential available from Venture's existing asset base. We have the financial strength and technical and operating expertise already in place to continue to unlock this upside within our portfolio.
We continue to believe that Centrica's Offer is opportunistic, taking advantage of uncertainty and weakness in the equity and energy markets earlier in the year. These markets have now improved significantly.
Since the date of Centrica's Offer announcement on 10 July 2009, the FTSE 100 index has risen by 13.5% and the share prices of Venture's UK E&P peers have risen by 17.2%, on average. Centrica's Offer is now at a 9% discount to Venture's share price after adjusting for the average peer group share price movement since 17 March 2009, the day prior to Centrica's announcement of its initial acquisition of shares in Venture.
Furthermore, since Centrica's Offer announcement, Brent oil forward prices for July 2011 have risen by 13.2% and gas prices for the 2011 calendar year have risen by 5.5%. With medium term rising production, Venture is ideally positioned to benefit from these rising prices."
John Morgan, Chairman of Venture commented:
"The independent RISC valuation clearly supports your Board's view that Centrica's Offer substantially undervalues Venture. Even the 1,066p per share base case is more than 25% higher than Centrica's Offer.
My message to shareholders remains clear - do not sell your shares on the cheap to Centrica. Venture is worth substantially more than 845p per share.
Shareholders should not sign any document which Centrica or its advisers send to them."
Further information for shareholders, including bases of calculation, sources for the information set out above and definitions of the terms used above, is contained in the circular being posted today and which will be available later today on www.venture-production.com and is available for inspection at:
Orrick, Herrington & Sutcliffe
Tower 42, Level 3525 Old Broad Street
London EC2N 1HQ
Enquiries:
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Venture Production plc Mike Wagstaff, Chief Executive
Brunswick Patrick Handley |
Telephone: +44 122 461 9000 Telephone: +44 207 404 5959 |
Notes to the editors
RISC was founded in 1994 to provide independent advice to companies associated with the oil and gas industry. RISC now has approximately 40 highly experienced professional staff at offices in London and Australia. They have completed over 1000 assignments in 55 countries for nearly 400 clients. RISC's services cover the oil and gas business lifecycle:
• Oil and gas asset valuations, expert advice to banks for debt or equity finance
• Exploration / portfolio management
• Field development studies and operations planning
• Reserves assessment and certification / Independent Expert / Expert Witness
• Strategy and corporate planning / Gas market advice
Further information about RISC can be found at www.riscpl.com
Related Shares:
Centrica