Venture Production said it enjoyed a record year in 2006 helped by a big increase in production, but confirmed it did not expect to pay a penny in tax on its earnings.

The Aberdeen oil and gas independent, which endured a turbulent spell following production disappointments earlier in the decade, enjoyed a 50% increase in output helped by bringing fields onstream and strengthened by acquisitions.

In a year of strong oil and gas prices, the growth had a dramatic effect on earnings at Venture, helping the company pass a significant landmark.

The company, which was set up to scavenge for so-called "stranded assets" in which bigger fish did not want to invest, generated significantly more cash than it needed to pay to fund huge investment in developing fields for the first time.

"2006 was a record year for Venture and we have continued to make great progress in increasing both production and reserves," said chief executive, Mike Wagstaff.

"As we enter 2007, activity is at record levels despite the tight market for equipment and services and we are confident that the momentum that we have established will continue."

Although Venture is focused 100% on the North Sea, the company confirmed that Chancellor of the Exchequer Gordon Brown's decision to raise the premium payable on North Sea profits from 10% to 20% from last April had no effect on the firm.

Brown's move outraged industry leaders. However, Venture has benefited from other changes made by him in previous years, particularly the decision in 2002 to allow operation and production companies to claim tax relief on 100% of investment spending in the first year, rather than claiming it over four.

In September, after announcing that it swung from a pre-tax loss of £5.9m to a profit of £97.7m in the six months ended June 30, Venture said it probably would not have to pay any tax on its 2006 profits.

In a trading update yesterday Venture said: "The 2006 tax charge is not expected to result in a cash charge at this time due to the utilisation of capital allowances."

Venture said average net production for 2006 was 44,706 barrels oil equivalent daily.

The £153m takeover of CH4 Energy, the first company acquired by Venture, provided a significant boost to gas production in the southern North Sea.

The company brought two new fields on stream and managed to reduce interruptions to pumping.

However Venture said production and explora tion drilling in the fourth quarter was hit by "unusually poor offshore weather conditions".