Venture Production said it was planning another year of big spending in the UK North Sea despite the sharp fall oil in prices since July.

Venture Production said it was planning another year of big spending in the UK North Sea despite the sharp fall oil in prices since July.

The Aberdeen-based independent said it expected to maintain total capital spending at £300m in 2009, with the vast bulk spent in the UK North Sea.

"We will be one of the few operators that will not be cutting back activity levels," said chief executive Mike Wagstaff, who has seen Venture reap the rewards of a controversial hedging policy recently.

In previous years Venture paid the price of deciding to sell oil and gas on futures markets for prices that were lower than could have been obtained when markets boomed.

Following a sharp fall in oil prices, from $147 per barrel in July to around $39 yesterday, the shoe has been on the other foot.

"We hedged oil two years ago at $70 per barrel for 2009. Last year in the first half that looked sub-optimal but it does not look so stupid now."

Two-thirds of Venture's output is gas, the price of which is in line with levels recorded last winter.

Confirming that Venture had not shelved any projects, Wagstaff said directors' assumptions regarding long term oil and gas prices had not changed since last year.

"None of the projects in our hopper are uneconomic."

Given developments elsewhere, the North Sea looked like a "very safe place to be".

A trading update indicated that Venture made good progress in the year to December following a tricky start.

In March the company said the start of output from the Chestnut field had been delayed.

Following past production reverses, Wagstaff said the delay left the management team battling to restore its credibility.

Yesterday the company confirmed that it increased average output by 9% to approximately 45,000 barrels oil equivalent per day ("boepd") in 2008, when it claimed to be one of the busiest firms in the North Sea.

Venture brought three fields onstream in the second half, including Chestnut. It achieved good results from assets that were already in production.

The growth in production combined with increased average oil and gas prices helped Venture achieve unaudited financial results in line with management expectations.

Venture expects to achieve "modest production growth" this year.

For the third year running Venture generated positive free cashflow after development capital expenditure.

In addition to capital expenditure of £250m Venture spent around £50m on a series of small acquisitions.

These were completed at prices that Wagstaff said made sense based on long term assumptions.

Venture was outbid for some producing assets.

"With the benefit of hindsight some people paid prices that they will be struggling to get a return on."

Venture is still in the market for deals.

The company had cash equivalents of approximately $300m (£190m) at the year end and a £365m bank facility.