News Column

Venoco Announces Financing Discussions

September 7, 2012

Staff --


Venoco, Inc. (NYSE: VQ) announced today that Denver Parent Corporation (DPC), an affiliate of Timothy Marquez, Venoco's Executive Chairman, has prepared a presentation with updated details about its financing of the merger contemplated by the merger agreement among Venoco, Mr. Marquez, DPC and another affiliate of Mr. Marquez.

DPC has advised Venoco that as a result of strong demand for the second lien term loan component of its financing, DPC expects the size of that facility to be increased from $175 million to $225 million. Consequently, DPC expects the financing package to include borrowings of $105 million under Venoco's existing revolving credit facility, a $225 million second lien term loan at Venoco, and capital raises by DPC in the amount of $230 million, including a volumetric production payment on assets to be sold to DPC by Venoco for $210 million. DPC intends that Venoco will use the cash proceeds from the asset sale to repay borrowings under the existing revolving credit facility and to make an offer to repurchase a portion of the outstanding Venoco Senior Notes at par. Additionally, DPC expects that Venoco will enter into a new first lien revolving credit facility with an initial borrowing base of $125 million and make a $31.0 million initial draw on that facility.

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.

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.

Source: (c) 2012. All rights reserved.

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