Venoco, Inc., a leading independent energy company, announced that it has entered into a definitive merger agreement under which Timothy M. Marquez, Venoco's Chairman and CEO, who, together with affiliated trusts and foundations, holds 50.3% of Venoco's common stock, will acquire Venoco through a wholly owned entity, Denver Parent Corporation.

Under the agreement, Venoco shareholders, excluding Mr. Marquez and his affiliated entities, will receive $12.50 per share in cash upon completion of the transaction. The price represents a premium of 63% to Venoco's closing price on Friday, January 13, 2012, the last trading day before the announcement of the transaction and a premium of 75% to the volume-weighted one-month moving average for that date, and implies a total enterprise value of approximately $1.5 billion.

The special committee of the board of directors that was formed in August 2011 to review the proposal from Mr. Marquez, with the assistance of independent legal and financial advisors, completed a thorough review of the proposal, investigated various alternatives and other potential bidders, and unanimously concluded that the transaction with Mr. Marquez was in the best interests of Venoco's minority shareholders. Based on the unanimous recommendation of the special committee, the agreement was also approved by the full board other than Mr. Marquez, who abstained.

Rick Walker, the Chairman of the special committee, stated, "After a thorough assessment, with the assistance of independent legal and financial advisors and after a comprehensive 5-month search of the market for superior alternatives, we concluded that this transaction will maximize value for our public shareholders. We are also pleased to have successfully negotiated a 'majority of the minority' approval right for our public shareholders."

Mr. Marquez said, "I am pleased to announce this transaction, which I believe will deliver significant value to our public shareholders. I am proud of the strong track record of our company, and our valued employees who make that possible. This transaction will position Venoco for the long term and allow our company to continue investing in its future in an era of continued economic uncertainty."

Completion of the transaction is subject to certain closing conditions, including receipt of shareholder approval, regulatory approvals, a financing condition and other customary conditions. The merger agreement contains a non-waivable condition that a majority of the outstanding shares of Venoco not owned by Mr. Marquez and his affiliates or by any director, officer or employee of Venoco or its subsidiaries vote in favor of the adoption of the merger agreement.

BofA Merrill Lynch and Strategic Energy Advisors, LLC are acting as financial advisors to the special committee, and Squire Sanders is acting as legal advisor to the special committee.

Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Mr. Marquez, and Citigroup and BMO Capital Markets are working with Mr. Marquez on the transaction.