Venture Production rules out bid for Breagh field

Published on Sunday 5 July 2009 21:43

VENTURE Production has confirmed it is not in the running for Breagh, a major North Sea gas field that has been put up for sale by its five owners.

Breagh, in the southern North Sea, is thought to be the largest discovered but undeveloped gas field in the UK continental shelf.

At the start of the year Venture, which specialises in buying discovered fields and bringing them into production, was expected by analysts to be a leading candidate to buy Breagh.

But the Aberdeen-based group's chief executive, Mike Wagstaff, has revealed to The Scotsman that the company had "had a look" at the discovery, but that it was no longer in contention to buy it. However, Venture is understood to have made an early bid for the discovery that was rejected by Breagh's owners.

Wagstaff said Breagh was a good asset but had "no idea" who is buying it. Analysts at Evolution Securities believe the discovery contains 600 billion cubic feet of recoverable gas reserves.

The field's five owners, mainly smaller oil explorers, have put a 70 per cent stake up for sale. Sterling Resources, a Canadian group that operates mainly in the North Sea, owns 45 per cent of Breagh, while Aberdeen-based Faroe Petroleum holds 10 per cent.

Alan Booth, the chief executive EnCore Oil, which owns 15 per cent of Breagh, confirmed last month that its owners are in exclusive negotiations with an unnamed third party.

Meanwhile, there were further reports yesterday that British Gas- owner Centrica, which is mulling a bid for Venture, will take an 850p-a-share bid directly to the Aberdeen firm's shareholders.

Suggestions a fortnight ago that Centrica was set to go hostile were played down, with no sign the utility has made any bid, let alone had it rejected – a usual precursor to going hostile. When asked about progress on the process last week, Wagstaff said that the situation was in the public domain.

He said: "You'll have to ask (Centrica chief executive] Sam Laidlaw, the ball's in his court." The Takeover Panel has given Centrica until 5pm on 13 July to table a firm bid or walk away.

If it does not bid, then it would have to wait at least six months before trying to buy Venture again, unless another company attempts to bid for it.