March 10, 2006
Mr. Timothy Marquez
Chairman and Chief Executive Officer
Venoco, Inc.
370 17th Street, Suite 2950
Denver, Colorado 80202-1370
Re: Venoco, Inc.
Amendment No. 1 to Registration Statement on Form S-1
Filed February 21, 2006
File No. 333-130478
Dear Mr. Marquez:
We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form S-1
General
1. The forepart of the prospectus should include only the cover
page,
table of contents, summary and risk factors sections. Please move
any other information so that it appears later in the document.
We
refer to the information appearing on pages ii and iii of the
prospectus.
Summary Operating and Reserve Information, page 8
Reserve Replacement Cost, page 9
2. In your response to comment 6 of our letter dated January 17,
2006, you state you have not always maintained records regarding
the
classification of proved developed versus proved undeveloped
reserves
for acquired reserves at the date of acquisition. Your response
is
unclear as to why the failure to classify such reserves does not
inaccurately impact other disclosures in your filing, where you
have
identified the amount of proved developed or proved undeveloped
reserves. Please address the statement made in your response to
our
prior comment 6 to explain the impact of this potential
misclassification.
Use of Proceeds, page 23
3. Please revise to disclose the amount of the proceeds to be used
for each purpose to which you refer.
Legal Proceedings, page 54
4. We note your disclosure with respect to the Beverly Hill
Litigation that you do not believe that an unfavorable outcome is
"probable or estimable." Please disclose the basis for this
belief.
Likewise, with respect to the personal injury claim, please also
disclose the basis for your belief that you "have no liability in
connection with the accident."
7. Notes Receivable - Employees, page F-25
5. We have reviewed your response to comment 43 of our letter
dated
January 17, 2006. Please tell us if your accounting for the notes
receivable - officers as of December 31, 2004 and 2003 is
consistent
with the accounting described as it relates to your notes
receivable
- - employees. If so, we reissue our prior comment 43 as it relates
to
notes receivable - officers. In your response, please address the
nature of such outstanding amounts as of each balance sheet date
presented.
Engineering Comments
Proved Reserves, page 9
6. We note your support for the proved undeveloped reserves
attributed to location B, lease 3242 on figure 1 in your
supplemental
engineering data. Please expand on this information to include an
analysis of the volumetric parameters for your estimated proved
reserves for this fault block.
Consolidated Financial Statements of Venoco, Inc. and
Subsidiaries,
page F-1
Estimated Net Quantities of Natural Gas and Oil Reserves, page F-
39
7. In part, your response 61 states, "The reduction [in proved
reserves] was due primarily to ... a reevaluation of a development
plan for a possible waterflood, a contractual production
constraint
that was not relaxed to the extent the Company had
anticipated...".
It appears these volumes did not qualify initially as proved
reserves. Please amend your document to remove these volumes from
your proved reserves at year-end 2003 and 2002.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under
the Securities Act of 1933 and that they have provided all
information investors require for an informed investment decision.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Please contact Shannon Buskirk at (202) 551-3717 or, in her
absence, April Sifford, Branch Chief, at (202) 551-3684 if you
have
questions regarding comments on the financial statements and
related
matters. Please contact James Murphy, Petroleum Engineer, at
(202)
551-3703 if you have any questions regarding comments on the
engineering matters. Please contact Jason Wynn at (202) 551-3756
or,
in his absence, Timothy Levenberg, Special Counsel, at (202) 551-
3707
with any other questions. Direct all correspondence to the
following
ZIP code: 20549-7010.
Sincerely,
H. Roger Schwall
Assistant Director
cc: S. Buskirk
A. Sifford
J. Wynn
T. Levenberg
J. Murphy
via facsimile
John Elofson, Esq.
Davis Graham & Stubbs LLP
(303) 893-1379
??
??
??
??
Mr. Timothy Marquez
Venoco, Inc.
March 10, 2006
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF CORPORATION FINANCE
MAIL STOP 7010