Venture Production’s chairman John Morgan and CEO Mike Wagstaff have defended the company’s hedging policy as it releases its final results.
Venture increased its daily production by 26% to 16,832 boe, but the average realised sales price fell by 6% to £14.22 per barrel and turnover was only 15% up at £81.5m.
Venture said this was as a result of the impact of the company’s hedging policy, as well as shifts in exchange rate and the higher proportion of lower value natural gas production.
Morgan and Wagstaff, however, said they were ‘convinced’ that the decision to put in place ‘a significant amount of oil and gas price hedging from 2004 until the end of 2006’ was the correct one.
‘Venture will see the benefits of this in terms of increased production volumes from new development projects coming on stream this year’, the chairman and CEO said.
‘During 2005 and 2006, the proportion of Venture’s oil and gas production that is hedged at prices below current market levels, will fall rapidly from levels seen during 2004.’
Venture reported an operating profit, before exceptional items, of £23.1m for 2004 – 10% down on the 2003 results.
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