Dana and Venture in tie-up talks

OIL explorer Dana Petroleum is in talks with struggling rival Venture Production over a merger that would create a North Sea-based independent worth nearly £400m.

Dana and Venture today said they were in the 'early stages of discussions which may lead to an all-share merger of the two companies', with the terms yet to be agreed. Sources said, however, it was likely the deal would be a nil-premium merger with Venture's shareholders happy to bring the two business together.

The Rothschild and Weinstock families own a combined 12% stake in Venture through private equity house Prospect. US private equity group Lime Rock owns 8%.

Venture has been hit by production setbacks and profit warnings since it listed in 2002 with a market value of £183 million.

The shares rose 6 1/2p to 160p.