Venoco Announces Advanced Financing Discussions

Venoco

announced today that it has been informed by Denver Parent Corporation, an affiliate of Timothy Marquez, Venoco's Executive Chairman, that DPC is engaged in advanced discussions regarding the financing of the merger contemplated by the merger agreement among Venoco, Mr. Marquez, DPC and another affiliate of Mr. Marquez (the "Merger Agreement"). DPC has advised Venoco that it expects the $436.5 million financing package to consist of a $21.5 million initial draw on a new first lien revolving credit facility with an initial borrowing base of $125 million, a $175 million second lien term loan at Venoco, an asset sale from Venoco to DPC in the amount of $210 million and capital raises by DPC in the amount of $240 million, including a volumetric production payment on the assets sold to DPC by Venoco. All of the financing transactions, including Venoco's new credit facility and term loan and its asset sale to DPC, would be structured to close contemporaneously with the closing of the merger contemplated by the Merger Agreement. Thus, the loan transactions and asset sale would not occur unless the merger is consummated. A completion date of the financing and closing of the merger has not been set although the transactions are currently expected to close prior to September 14, 2012. Neither Venoco nor DPC has entered into definitive agreements with respect to any aspect of the financing. Completion of the financing is subject to finalization of terms, negotiation and execution of definitive agreements, other customary conditions, including satisfactory completion of due diligence by financing sources, and, in the case of the asset sale described above, approval by the independent members of Venoco's Board of Directors. Accordingly, there can be no assurance that all or any of the financing transactions, or the merger, will be completed within the expected time period, on the terms contemplated, or at all.