Venoco Commences Cash Tender Offer, Solicits Consents for 2011 Notes

Venoco has commenced a cash tender offer to purchase any and all of its outstanding 8 3/4% Senior Notes due 2011, of which $150 million in aggregate principal amount was outstanding as of July 2, 2009. Venoco is also soliciting consents from the registered holders of the Notes to certain proposed amendments to the indenture governing the Notes, including the elimination of substantially all of the restrictive covenants, certain events of default and certain other provisions. The tender offer and consent solicitation are described in detail in an Offer to Purchase and Consent Solicitation Statement dated today.

The tender offer is scheduled to expire at 12:00 midnight, Eastern time, on July 30, 2009, unless extended or earlier terminated. The total consideration for each $1,000 principal amount of Notes tendered and accepted for payment will be $1,000, which includes the consent payment of $30 per $1,000 principal amount of notes. In order to receive the total consideration, holders of Notes must tender and not withdraw their Notes and deliver and not rescind their corresponding Consents on or prior to the consent deadline, which is 5:00 p.m., Eastern time, on July 15, 2009, unless extended or earlier terminated. Holders of Notes who tender their Notes after the consent deadline and on or before the expiration date will only receive the tender offer consideration of $970 per $1,000 principal amount of Notes, which is the total consideration minus the consent payment.

In addition to the total consideration or the tender offer consideration, as applicable, holders of Notes tendered and accepted for payment will receive accrued and unpaid interest on the Notes from the last interest payment date for the Notes to, but not including, the applicable settlement date. Venoco intends to fund the purchase of the Notes and payment of Consents with proceeds from a financing transaction, as described below.

Except as set forth in the Statement or as required by applicable law, Notes tendered may be withdrawn and Consents delivered may be revoked at any time on or prior to the withdrawal date, which is 5:00 p.m., Eastern time, on July 15, 2009, by following the procedures described in the Statement. Notes tendered on or prior to the withdrawal date that are not validly withdrawn on or prior to the withdrawal date may not be withdrawn thereafter. Notes tendered after the withdrawal date may not be withdrawn.

Venoco currently expects to have an initial settlement for Notes that are tendered on or prior to the consent deadline after the consent deadline and promptly following the satisfaction of the Financing Condition (as defined below), followed by a final settlement promptly after the expiration date for Notes tendered after the consent deadline which is currently July 30, 2009. Venoco reserves the right to delay the initial settlement date, as a result of which the initial settlement date may occur as late as the final settlement date.

The tender offer and consent solicitation are conditioned on the satisfaction of certain conditions disclosed in the Statement, including, but not limited to, (i) the consummation by Venoco of debt financing on terms and conditions satisfactory to Venoco and resulting in the receipt by Venoco of gross proceeds of not less than the principal amount of the Notes outstanding (the "Financing Condition"), (ii) the tender on or prior to the consent date of Notes representing a majority of the principal amount of the Notes then outstanding, (iii) the execution by the trustee of the supplemental indenture implementing the proposed amendments to the indenture following receipt of the requisite consents, and (iv) certain other conditions as described in the Statement. If the Financing Condition or any other condition in the Statement is not satisfied, Venoco is not obligated to accept for purchase, or to pay for, Notes tendered (and corresponding Consents) and may delay the acceptance for payment of, any tendered Notes, in each event, subject to applicable laws, and may terminate, extend or amend the tender offer and may postpone the acceptance for purchase of, and payment for, Notes so tendered.
 

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