22nd September 2008    

VENTURE PRODUCTION plc

First Oil from Chestnut

Venture Production plc ("Venture"), the Aberdeen based UK independent oil and gas production company, today announces that the Chestnut oil field has commenced production. Chestnut has been developed using the new Sevan Hummingbird floating production storage and offtake unit ('FPSO').  Venture is the operator and holds a 69.875% working interest in the part of block 22/2a containing the Chestnut field.

The Hummingbird is the second Sevan 300 unit to be built and the first cylindrical FPSO to be deployed in the North Sea.  It will stay on location until the Chestnut field ceases production but will then be available to Venture for re-use on a follow on project.  

Chestnut has net recoverable reserves estimated at 6.8 million barrels of oil equivalent ("MMboe") and initial average net production rates are expected to be between 6,000 and 10,000  barrels of oil equivalent per day ("boepd").

A second Chestnut production well was spudded on 7 September 2008. This well will be completed and tied-in during early 2009 and is expected to both significantly increase production rates, recoverable reserves and extend the field life.  Investment in this second production well was sanctioned in May 2008 and on current plans  will be drilled and brought onstream in less than nine months.

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

"Bringing Chestnut into production is an important milestone for Venture. Not only will Chestnut make a significant contribution to group production but it is also one of the smallest stand alone oil field developments in the North Sea.   Utilising innovative new technology, Venture has been able to unlock the potential of an oil field which was originally discovered 22 years ago and represents a great team achievement by all our partners involved in the field development. Completion of this project has taken a bit longer than we had originally anticipated but, given that we sanctioned this development when oil prices were less than a third of where they are today, it is a fantastically valuable project for Venture and its co-venturers. "

ENDS

Contact:

Mike Wagstaff, Chief Executive

Jon Murphy, Chief Operating Officer                                      01224 619000

Patrick Handley, Brunswick                                                    0207 404 5959

John MacDonald, Weber Shandwick (Scottish press)          01224 806600

  Notes to Editors:

Chestnut Field

• The Chestnut field is one of the oldest undeveloped oil fields in the North Sea having been discovered in 1986

• Chestnut lies approximately 180km east of Aberdeen in a water depth of 120m and is 13km south east of the Alba oil field

• The Chestnut field co-venturers are: 

  • Venture Production plc (Operator) - 69.875% 

  • Bow Valley Petroleum (UK) Limited - 15.125% 

  • Atlantic Petroleum UK Limited - 15.000%

• Venture acquired an initial 5.0% interest in Chestnut in 2001 and increased its stake to 69.875% through further acquisitions in 2002 and 2003

• FDP approval for Chestnut was obtained in late 2005 for a single production well development with water injector support

• The production well (22/2a-11x) was drilled and tested at rates of between 10,000 and 15,000 barrels of oil per day ("bopd") in 2001 by the previous operator

• The extended well test lasted for approximately four months and around 1 million barrels of oil were produced before it was shut-in

• The water injector well (22/2a-12) was drilled by Venture in mid-2006 and showed pressure communication with the original production well

Sevan Hummingbird

• The Sevan Hummingbird hull was constructed at the Yantai Raffles Shipyard in China. The unit was then moved to Keppel Verolme Shipyard in Rotterdam, Holland where the outfitting and assembly of the processing plant took place.

• The platform is a Sevan 300 FPSO with an oil storage capacity of 270,000 bbls. The unit can carry up to 3 risers and umbilicals and will have an oil processing capacity of 30,000 barrels of oil per day and a water injection capacity of 20,000 barrels of water per day.

Development Partners

-    Wood Group Engineering (North Sea) Limited have worked alongside Sevan Marine ASA and the Venture Production team to bring Chestnut on stream

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