SOURCE: Venoco, Inc.

Venoco, Inc.

September 12, 2011 07:02 ET

Venoco, Inc. Receives Final Approval for Pipeline; 2011 Capex Updated

DENVER, CO--(Marketwire - Sep 12, 2011) - Venoco, Inc. (NYSE: VQ) announced that its wholly owned subsidiary, Ellwood Pipeline Incorporated, received the final approval needed to install an onshore pipeline to transport crude oil from the company's South Ellwood field.

"After almost three years in the permitting process, we are very pleased to announce we are ready to begin construction of this pipeline, which will eliminate the use of the barge," said Tim Marquez, Chairman and CEO of Venoco.

"Securing a long-term method of transportation should allow us to add a minimum of 7 million barrels of reserves not currently recognized by our independent reserve engineers," Mr. Marquez continued. "Once we have the pipeline in service and new contracts in place, we expect to realize $5 to $7 per barrel more on the approximately 2,000 barrels per day of production from our South Ellwood field. This is due to reduced transportation costs and a greater number of refineries to which we can market our crude oil."

The company also updated its forecast of capital expenditures for 2011 from $200 million to $250 million which includes costs associated with the construction of the pipeline as well as retaining drilling rigs in its West Montalvo field, Sevier prospect and in the Sacramento Basin for the duration of the year.

"Spending this additional capital later in 2011 is not expected to impact production this year; however, we do anticipate these expenditures will be impactful to 2012 production," Mr. Marquez said.

About the Company

Venoco is an independent energy company primarily engaged in the acquisition, exploitation and development of oil and natural gas properties primarily in California. Venoco operates three offshore platforms in the Santa Barbara Channel, has non-operated interests in three other platforms, operates three onshore properties in Southern California, and has extensive operations in Northern California's Sacramento Basin.

Forward-looking Statements

Statements made in this news release relating to Venoco's construction of the pipeline and the effect of the pipeline on the Company's reserves and pricing under future sales contracts, the Company's future capital expenditures and related production, and all other statements except statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks and uncertainties and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the timing and extent of changes in oil and gas prices, the timing and results of drilling and other development activities, and unanticipated construction issues. All forward-looking statements are made only as of the date hereof and the Company undertakes no obligation to update any such statement. Further information on risks and uncertainties that may affect the Company's operations and financial performance, and the forward-looking statements made herein, is available in the company's filings with the Securities and Exchange Commission, which are incorporated by this reference as though fully set forth herein.

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