THE head of Venture Production yesterday predicted the North Sea would still be a "significant" producing region in 2050 as the £1 billion-plus oil and gas explorer cheered a record first-half result.
Mike Wagstaff, chief executive of the Aberdeen-based group, said the region remained a key global producer, accounting for about 7.5 per cent of world oil and gas output.
Unveiling a 67 per cent hike in pre-tax profits to £113.2 million, Wagstaff
said: "Everyone has been predicting the death of the North Sea for at least 15 years.
"Yes, production has peaked and what is left is tougher and more expensive to get out. But I think the North Sea will still be a significant producing region in 2050. It is still a great place to do business."
Venture, which is focused on the UK and Dutch sectors of the North Sea, specialises in acquiring and developing "stranded assets" – discovered but undeveloped reserves.
During the six months to the end of June, production volumes rose 8 per cent to 45,534 barrels of oil equivalent per day – close to record levels for a half-year period.
Venture said the timing of first oil from the Chestnut field, in which the firm has a majority stake, would govern the outturn of second-half production. However, it expects the figure to be higher than the first half. As a result, full-year production is expected to be between 45,000 and 47,500 barrels per day – up to 15 per cent up on 2007.
Seven development fields are due to come on stream over the next two years, Venture noted.
The group made nine acquisitions in the first half, adding interests in 11 new discoveries and three exploration prospects.
The deals have also increased the group's exposure to a strengthening gas market, which has seen wholesale prices triple since last year's lows.
What is proving to be a burden for consumers, with utility companies unveiling hefty price rises in recent weeks, is welcome news for producers.
Wagstaff pointed out that two-thirds of Venture's output was now gas, and said the group was well placed even if oil and gas prices come off the boil.
"We believe our success is sustainable. A fair amount of our production is hedged at prices below where the forward curve is," he said.
"Therefore we haven't seen the full benefit of the upside."
Venture, which is one of Scotland's biggest listed companies with a market capitalisation of about £1.2bn, expects the nine deals completed in the first half to add more than 10,000 barrels a day "from late 2010 onwards".
Wagstaff promised further acquisitions but stressed there was no fixed pot of money set aside. "Deals are always lumpy and unpredictable," he said. "We have seriously looked at more deals already this year than we did in the whole of last year."
Shares in Venture, whose first-half revenues surged 55 per cent to £240.5m, dipped 4p to 796p as oil prices eased.
The full article contains 517 words and appears in The Scotsman newspaper.
