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Venture Production Recommend Acceptance of Offer From Centrica

Venture Production

On 16 July 2009, Centrica Resources (UK) Limited ('Centrica') made a final cash offer to acquire the entire issued (and to be issued) share capital of Venture Production ('Venture'), not already held by it, at an offer price of 845 pence per share (the 'Offer'). On 21 August 2009 the Offer became a mandatory cash offer.

The Board of Venture Production notes the announcement by Centrica on 24 August 2009 that:

(a) as at 6:24pm (London time) on 24 August 2009 Centrica either owned or had received valid acceptances of the Offer in respect of a total of 87,868,240 shares, representing in aggregate approximately 58.7 per cent. of the issued share capital of Venture; and

(b) subject to the settlement of a sufficient number of the acquisitions announced by Centrica on 24 August 2009, Centrica will either own or have received valid acceptances of the Offer greater than 50 per cent of the existing issued share capital of Venture and will be able to declare the Offer wholly unconditional.

The Board of Venture continues to believe that Centrica's final offer substantially undervalues Venture. However, the Board recognises that, in the event that the Offer is declared wholly unconditional, Centrica will have control of Venture. Furthermore, should Centrica receive acceptances which result in Centrica holding 75 per cent or more of Venture's shares, Centrica's stated intention is to procure that Venture applies to the UK Listing Authority for the cancellation of its listing on the Official List and to the London Stock Exchange for the cancellation of its admission to trading. Consequently, there is a risk that Venture shareholders who do not accept the Offer could, as a result, own a minority interest in an unlisted company. This would significantly reduce the liquidity and marketability of Venture shares.

Therefore, the Board, which has been so advised by Rothschild, Lambert Energy, Oriel and UBS Investment Bank, recommends that, in the event that the Offer is declared wholly unconditional by Centrica, shareholders accept the Offer, as the directors have decided they will do in respect of their own beneficial holdings.

Larry Kinch and ArcLight Capital Partners, LLC ('ArcLight') have informed the Board that they intend to assent the shares they control (in the case of ArcLight including those held through a partnership with co-investors) into the Offer, representing an aggregate holding of approximately 19.2 million Venture shares or 12.8 per cent of the issued share capital of Venture.

The Offer will remain open for acceptance until the next closing date, which will be 1.00 pm (London time) on 14 September 2009. Full details of how to accept the Offer are set out in the Offer document, published on 16 July 2009.

Venture shareholders who require assistance in accepting the Offer (or who require a replacement Form of Acceptance and Election) should telephone Equiniti Limited ('Equiniti') (the receiving agent for the Offer), on 0871 384 2857 (from within the United Kingdom) or +44 121 415 7571 (from outside the United Kingdom).

However, Venture shareholders should be aware that Equiniti cannot provide any financial, legal or taxation advice in connection with the Offer nor any advice on the merits of the Offer. Venture shareholders who are in any doubt as to what action to take are recommended to seek their own personal financial advice immediately from their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if they are resident in the United Kingdom or, if not, from another appropriately authorised financial adviser in their own jurisdiction.

Published 25/08/09

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