Toreador Enters Exchange Agreement for Senior Notes

Toreador has entered into a privately negotiated exchange agreement with an institutional investor for the exchange of $22.2 million aggregate principal of the Company's existing 5.00% Convertible Senior Notes due 2025 (the "Existing Notes") and new funding of $9.4 million cash for $31.6 million aggregate principal of new 8.00%/7.00% Convertible Senior Notes due 2025 (the "New Notes"), plus accrued and unpaid interest on the Existing Notes being exchanged.

Toreador President and CEO Craig McKenzie commented, "We are very pleased to have negotiated this agreement with this investor. The exchange significantly reduces the amount of the existing 5% Convertible Senior Notes that the company could be required to repurchase in October 2010. The removal and/or restructuring of our current debt has been a key strategic goal, and this transaction adds flexibility to our balance sheet going forward."

The terms of the New Notes are substantially the same as those of the Existing Notes. Key differences include:

• The New Notes will only be convertible under certain circumstances in the first 12 months and freely convertible thereafter. The coupon for the New Notes will be 8.00% during the first 12 months and 7.00% thereafter.
• The New Notes have an initial conversion rate of 72.9927 shares of common stock per $1,000 principal amount of New Notes, representing an initial conversion price of approximately $13.70 per share, subject to certain adjustments, including upon the completion of securities offerings within specified parameters.
• The New Notes extend the holder put and issuer call dates from October 1, 2010 to October 1, 2013.
• The New Notes contain a limitation on the Company’s ability to incur or increase its level of debt based on its proved and probable reserves.

The exchange transactions are scheduled for settlement today, February 1, 2010, subject to customary closing conditions. RBC Capital Markets and Thomas Weisel Partners LLC acted as advisors to the Company for the exchange transaction.