Venoco

Venoco, Inc. was a United States oil and gas exploration and production company founded in September 1992 by Timothy Marquez. Its operations were concentrated in California, particularly in and around the Monterey Formation, an extensive geological formation that the company regarded as a significant hydrocarbon opportunity. Venoco also held interests in onshore oil fields and offshore federal leases in Southern California. The company developed through a combination of field transactions, public-market financing, and drilling investment. In 2005, it sold the Big Mineral Creek field for $45 million. Venoco became a publicly traded company through an initial public offering in November 2006. The following year, it acquired the West Montalvo Oil Field from Berry Petroleum Company for $63 million. Venoco later sold that field to California Resources Corporation in 2014 for $200 million, making the asset one of the most notable transactions in its operating history. During the early 2010s, Venoco sought to expand production from the Monterey Formation. In 2011, it reportedly spent approximately $100 million developing wells in the formation. The company’s drilling and proposed hydraulic-fracturing activities attracted opposition from environmental organizations and residents. In Santa Barbara County, authorities initially cited Venoco for allegedly conducting fracking without a permit, although the citation was later withdrawn. In Monterey County’s Salinas basin, opposition focused on nine proposed wells and on the composition of proposed fracturing fluids, including a proprietary Baker Hughes formulation containing a petroleum-distillate blend. Venoco’s ownership and corporate structure changed in 2012, when Marquez acquired the 49 percent of the company that he did not already own, taking the company private. Its operating position subsequently weakened after the 2015 Refugio oil spill led to the closure of a pipeline on which Venoco depended. The resulting disruption reduced production by about half. Venoco filed for bankruptcy in March 2016. The company filed for bankruptcy again on April 17, 2017, and began liquidation. By that point, Venoco was owned by affiliates of Apollo Global Management. The liquidation included the relinquishment of five federal oil and gas leases offshore Southern California on January 4, 2018. Venoco therefore ended as a defunct regional exploration and production company rather than continuing as an operating energy brand. Its history reflects the capital intensity, permitting exposure, environmental scrutiny, infrastructure dependence, and commodity-sector risk associated with California oil and gas development.

Venoco was established in September 1992 by Timothy Marquez as an independent hydrocarbon exploration company focused on California opportunities. Its business was based on acquiring, developing, and operating oil and gas assets rather than marketing consumer energy products. The Monterey Formation became the central theme of its growth strategy, while the company also pursued individual oil-field transactions and offshore lease interests. The company expanded its asset base through transactions during the 2000s. In 2005, it sold the Big Mineral Creek field for $45 million. In November 2006, Venoco entered the public markets through an initial public offering. In 2007, it acquired the West Montalvo Oil Field from Berry Petroleum Company for $63 million. The acquisition gave Venoco a significant operating asset in California and illustrated its strategy of building value through field ownership and development. Venoco’s principal technical and commercial emphasis shifted toward the Monterey Formation during the early 2010s. In 2011, it spent approximately $100 million developing wells in the formation. The company’s proposed use of hydraulic fracturing became controversial. In Santa Barbara County, a group of concerned citizens challenged the company’s fracking activities, and the county Board of Supervisors initially cited Venoco for allegedly conducting fracking without a permit. The citation was subsequently withdrawn. The proposed test-well area was near California wine-producing regions, adding local land-use and environmental concerns to the debate. Venoco encountered further opposition in the Salinas basin in Monterey County, where environmental groups and residents objected to nine proposed wells. Public concern included the chemicals disclosed for proposed fracturing fluids. The listed materials included a gelling agent containing a 60-to-70-percent concentration of a petroleum-distillate blend. The precise composition was proprietary to Baker Hughes, which meant that critics argued the disclosure did not fully identify the proposed chemical mixture. Ownership changed in 2012. Timothy Marquez acquired the 49 percent of Venoco that he did not already own, converting the company from a public company into a privately held enterprise. Venoco subsequently sold the West Montalvo Oil Field in 2014 to California Resources Corporation for $200 million. The sale represented a substantial increase over the $63 million acquisition price reported in 2007, although the available reference material does not provide sufficient information to calculate the company’s overall return after development and operating costs. The company’s financial and operational position deteriorated after the 2015 Refugio oil spill. Closure of a pipeline on which Venoco depended cut its production by approximately half. The disruption underscored the company’s dependence on transportation infrastructure and contributed to its filing for bankruptcy in March 2016. Venoco filed for bankruptcy again on April 17, 2017, and began liquidation. At that time, the company was owned by affiliates of Apollo Global Management. The liquidation process ultimately ended the company’s operating presence. On January 4, 2018, Venoco relinquished five federal oil and gas leases offshore Southern California. Venoco’s history thus concluded with the wind-down of a California-focused exploration company whose expansion ambitions were constrained by drilling controversy, regulatory exposure, infrastructure disruption, and financial distress.

• 2018

  Offshore leases relinquished

  [1]Venocoen.wikipedia.org

  Venoco relinquished five federal oil and gas leases offshore Southern California on January 4.

• 2017

  Second bankruptcy and liquidation

  [1]Venocoen.wikipedia.org

  Venoco filed for bankruptcy again on April 17 and began liquidation.

• 2016

  First bankruptcy filing

  [1]Venocoen.wikipedia.org

  Venoco filed for bankruptcy in March.

• 2015

  Refugio spill disrupts operations

  [1]Venocoen.wikipedia.org

  The Refugio oil spill caused closure of a dependent pipeline and reduced Venoco’s production by approximately half.

• 2014

  West Montalvo field sold

  [1]Venocoen.wikipedia.org

  Venoco sold the West Montalvo Oil Field to California Resources Corporation for $200 million.

• 2012

  Return to private ownership

  [1]Venocoen.wikipedia.org

  Timothy Marquez acquired the remaining 49 percent of Venoco and took the company private.

• 2011

  Monterey Formation development program

  [1]Venocoen.wikipedia.org

  The company invested approximately $100 million in developing wells in the Monterey Formation.

• 2007

  West Montalvo acquisition

  [1]Venocoen.wikipedia.org

  Venoco acquired the West Montalvo Oil Field from Berry Petroleum Company.

• 2006

  Initial public offering

  [1]Venocoen.wikipedia.org

  Venoco became a public company through an initial public offering in November.

• 2005

  Big Mineral Creek field sold

  [1]Venocoen.wikipedia.org

  Venoco sold the Big Mineral Creek field for $45 million.

• 1992

  Venoco is founded

  [1]Venocoen.wikipedia.org

  Timothy Marquez founded Venoco in September 1992 as a hydrocarbon exploration company.

A California-focused independent oil and gas exploration and production company, positioned around the development of regional hydrocarbon assets, especially resources associated with the Monterey Formation.

• Oil and gas exploration and production · 2011

  Monterey Formation development

  Venoco’s principal growth initiative centered on exploring and developing hydrocarbon-bearing portions of California’s Monterey Formation. The program included drilling and development spending, including approximately $100 million reported in 2011. Proposed hydraulic-fracturing activity associated with the program became the subject of regulatory and community opposition.

• Onshore oil-field operation · 2007

  West Montalvo Oil Field

  The West Montalvo Oil Field was an important California asset acquired by Venoco from Berry Petroleum Company in 2007. Venoco operated and developed the field before selling it to California Resources Corporation in 2014. It was therefore a major asset in Venoco’s portfolio rather than a consumer-facing product.

• Offshore oil and gas leases

  Southern California offshore federal leases

  Venoco held federal oil and gas lease interests offshore Southern California. These leases formed part of the company’s regional exploration portfolio, but five were relinquished during the liquidation process in January 2018.

• 2015

  Refugio oil spill operational impact

  The Refugio oil spill resulted in closure of a pipeline on which Venoco depended and reduced its production by approximately 50 percent. The available reference identifies the operational consequences but does not establish that Venoco caused the spill.

  Source

• 2011

  Hydraulic-fracturing controversy in California

  Venoco’s fracking-related activities and proposed wells in Santa Barbara and Monterey counties generated opposition from residents and environmental groups. Santa Barbara County initially cited the company for allegedly fracking without a permit, but later withdrew the citation. Critics also questioned the disclosure of proprietary components in proposed fracturing fluids.

  Source

Read more

• 2011Monterey Formation drilling and development program

  California

  Venoco pursued expanded drilling and development in the Monterey Formation, committing approximately $100 million to wells and related development activity.

  Outcome. The program faced environmental and regulatory opposition and did not prevent the company’s later financial distress.

  Source
• 2011Proposed Monterey County hydraulic-fracturing program

  Monterey County, California

  Venoco proposed nine wells in the Salinas basin and identified components of a proposed fracturing fluid, including a proprietary Baker Hughes formulation containing a petroleum-distillate blend.

  Outcome. Environmental groups and local residents opposed the proposals; the reference material does not establish that the full program was completed.

  Source

• 2017

  Commence liquidationStrategy

  Background

  Venoco was unable to continue as a viable operating company after renewed financial distress.

  Action taken

  The company filed for bankruptcy on April 17 and began liquidation under ownership affiliated with Apollo Global Management.

  Aftermath

  Venoco relinquished five federal offshore leases in January 2018 and ceased operating as an independent company.

  Source

• 2016

  File for bankruptcyOther

  Background

  Production had been reduced by approximately half after closure of a pipeline connected to the Refugio oil spill.

  Action taken

  Venoco filed for bankruptcy in March 2016.

  Aftermath

  The company later filed again in 2017 and entered liquidation.

  Source

• 2014

  Sell the West Montalvo Oil FieldM&A

  Background

  Venoco reassessed its California asset portfolio after owning and developing the field acquired in 2007.

  Action taken

  The company sold the West Montalvo Oil Field to California Resources Corporation.

  Aftermath

  The transaction generated a reported $200 million sale value, but the available material does not provide sufficient cost data for a full profitability assessment.

  Sale price. $200 million (2014)

  Source

• 2012

  Take Venoco privateM&A

  Background

  Timothy Marquez already owned 51 percent of the company and sought full ownership.

  Action taken

  Marquez acquired the remaining 49 percent of Venoco, making it privately held.

  Aftermath

  Venoco operated as a private company until its later bankruptcy and liquidation.

  Source

• 2007

  Acquire the West Montalvo Oil FieldM&A

  Background

  Venoco sought to expand its California producing-asset portfolio.

  Action taken

  The company acquired the West Montalvo Oil Field from Berry Petroleum Company for $63 million.

  Aftermath

  Venoco later sold the field to California Resources Corporation in 2014.

  Acquisition price. $63 million (2007)

  Source

1. 1Venocoen.wikipedia.org