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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2014
For the quarterly period ended March 31, 2015
Or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Numbers: ~~Venoco, Inc. 001-33152~~ Denver Parent Corporation 333-191602 Venoco, Inc. 001-33152

~~Venoco, Inc.~~ Denver Parent Corporation Venoco, Inc.

Delaware Delaware (State or other jurisdiction of incorporation or organization)		~~77-0323555~~ 44-0821005 77-0323555 (I.R.S. Employer Identification Number)
370 17th Street, Suite 3900 Denver, Colorado (Address of principal executive offices)		80202-1370 (Zip Code)

Registrant's telephone number, including area code: (303) 626-8300

N/A
(Former name or former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Venoco, Inc. YES o NO ý Denver Parent Corporation YES ýo NO oý

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


Venoco, Inc.	YES ý	NO o
Denver Parent Corporation	YES ý	NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Venoco, Inc.	Large accelerated filer o	Accelerated filer o	Non-accelerated filer ý (Do not check if a smaller reporting company)	Smaller reporting company o
Denver Parent Corporation	Large accelerated filer o	Accelerated filer o	Non-accelerated filer ý (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Venoco, Inc.	YES o	NO ý
Denver Parent Corporation	YES o	NO ý

As of ~~November~~May 1915, ~~2014~~2015, there were 30,297,459 shares of common stock of Denver Parent Corporation and 29,936,378 shares of common stock of Venoco, Inc. outstanding.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report on Form 10-Q contains forward-looking statements. The use of any statements containing the words "anticipate," "intend," "believe," "estimate," "project," "expect," "plan," "should" or similar expressions are intended to identify such statements. Forward-looking statements included in this report relate to, among other things, expected future production, expenses and cash flows, the nature, timing and results of capital expenditure projects, amounts of future capital expenditures, our ~~proposed lease line adjustment in the South Ellwood field, our~~ future debt levels and liquidity and Venoco's future ability to pay cash dividends, and its compliance with ~~covenants~~obligations under ~~its~~their ~~revolving~~respective ~~credit~~debt ~~agreement, possible waivers in the event of non-compliance with those covenants or amendments to the agreement, and the availability of potential deleveraging transactions~~agreements. The expectations reflected in such forward-looking statements may prove to be incorrect. Disclosure of important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are included under the heading "Risk Factors" in this report and in the Venoco, Inc. / Denver Parent Corporation Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014. Certain ~~cautionary~~ cautionary statements are also included elsewhere in this report, including, without limitation, in conjunction with the forward-looking statements. All forward-looking statements speak only as of the date made. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. We undertake no obligation to update any forward-looking statement. Factors that could cause actual results to differ materially from our expectations include, among others, those factors referenced in the "Risk Factors" section of this report and the Venoco, Inc. / Denver Parent Corporation Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014 and such things as:

•: changes in oil and natural gas prices, including reductions in prices that would adversely affect our revenues, income, cash flow from operations, liquidity and reserves;
•: adverse conditions in global credit markets and in economic conditions generally;
•: risks relating to the concentration of our properties in a limited number of areas in California;
•: risks related to our indebtedness and a potential inability to effect deleveraging transactions or otherwise reduce those risks;
•: our ability to replace oil and natural gas reserves;
•: risks arising out of our hedging transactions;
•: our inability to access oil and natural gas markets due to operational impediments;
•: uninsured or underinsured losses in, or operational problems affecting, our operations;
•: variable nature and uncertainty in reserve estimates and expected production rates;
•: risks associated with litigation, arbitration or other legal proceedings that we are involved in, including the costs of participating in those proceedings and the risk of adverse outcomes;
•: exploitation, development and exploration results, including in the onshore Monterey shale, where our results will depend on, among other things, our ability to identify productive intervals and drilling and completion techniques necessary to achieve commercial production from those intervals;
•: the consequences of changes we have made, or may make from time to time in the future, to our capital expenditure budget, including the impact of those changes on our production levels, reserves, results of operations and liquidity;
•: challenges and difficulties in managing expenses, including expenses associated with asset retirement obligations;
•: a lack of available capital and financing;

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•: the potential unavailability of drilling rigs and other field equipment and services;
•: the existence of unanticipated liabilities or problems relating to acquired businesses or properties;
•: difficulties involved in the integration of operations we have acquired or may acquire in the future;
•: the effect of any business combination, joint venture or other significant transaction we may pursue or have pursued, or the costs of litigation related thereto, and purchase price or other adjustments in connection with such transactions that may be unfavorable to us;
•: factors affecting the nature and timing of our capital expenditures;
•: the impact and costs related to compliance with or changes in laws or regulations governing or affecting our operations, including changes resulting from the Deepwater Horizon well blowout in the Gulf of Mexico, from the Dodd-Frank Wall Street Reform and Consumer Protection Act or its implementing regulations and from regulations relating to greenhouse gas emissions;
•: delays, denials or other problems relating to our receipt of operational consents and approvals from governmental entities and other parties;
•: environmental liabilities;
•: loss of senior management or technical personnel;
•: natural disasters, including severe weather;
•: acquisitions and other business opportunities (or the lack thereof) that may be presented to and pursued by us;
•: risk factors discussed in this report; and
•: other factors, many of which are beyond our control.

Explanatory Note

This Quarterly Report on Form 10-Q is a combined report being filed by Denver Parent Corporation ("DPC") and Venoco, Inc. ("Venoco"), a direct 100% owned subsidiary of DPC. DPC is a holding company formed to acquire all of the common stock of Venoco in a going private transaction that was completed in October 2012. Unless otherwise indicated or the context otherwise requires, (i) references to "DPC" refer only to DPC, (ii) references to the "Company," "we," "our" and "us" refer, for periods following the going private transaction, to DPC and its subsidiaries, including Venoco and its subsidiaries, and for periods prior to the going private transaction, to Venoco and its subsidiaries and (iii) references to "Venoco" refer to Venoco and its subsidiaries. Each registrant included herein is filing on its own behalf all of the information contained in this quarterly report that pertains to such registrant. When appropriate, disclosures specific to DPC or Venoco are identified as such. Each registrant included herein is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information. Where the information provided is substantially the same for both companies, such information has been combined. Where information is not substantially the same for both companies, we have provided separate information. In addition, separate financial statements for each company are included in the Financial Statements section.

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section. All of Venoco's net assets are owned by DPC and all of DPC's operations are conducted by Venoco.

We operate DPC and Venoco as one business, with one management team. Management believes combining the Quarterly Reports on Form 10-Q of DPC and Venoco provides the following benefits:

•: Enhances investors' understanding of DPC and Venoco by enabling investors to view the business as a whole, the same manner in which management views and operates the business;
•: Provides a more readable presentation of required disclosures with less duplication, since a substantial portion of the disclosures apply to both DPC and Venoco; and
•: Creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

4 All of Venoco's net assets are owned by DPC and all of DPC's operations are conducted by Venoco.

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT CORPORATION AND SUBSIDIARIES Form 10-Q for the Quarterly Period Ended ~~September~~March 3031, ~~2014~~2015

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PART I.	FINANCIAL INFORMATION	65
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets at December 31, 2013 and September 30, 2014	6
	Condensed Consolidated Balance Sheets at December 31, 2014 and March 31, 2015	5
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and the Three and Nine Months Ended September 30, 2014	7
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2014 and the Three Months Ended March 31, 2015	6
	Condensed Consolidated Statements of Changes in Stockholders' Equity for the Nine Months Ended September 30, 2014	8
	Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended March 31, 2015	7
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and the Nine Months Ended September 30, 2014	9
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and the Three Months Ended March 31, 2015	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3330
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4741
Item 4.	Controls and Procedures	4943
PART II.	OTHER INFORMATION	5044
Item 1.	Legal Proceedings	5044
Item 1A.	Risk Factors	5044
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5044
Item 3.	Defaults upon Senior Securities	5044
Item 4.	Mine Safety Disclosures	5044
Item 5.	Other Information	5044
Item 6.	Exhibits	5044
Signatures		5246

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PART I—FINANCIAL INFORMATION

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share amounts)

	Venoco, Inc.						Denver Parent Corporation

	December 31, 2014			March 31, 2015			December 31, 2014			March 31, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	15,455		$	7,921		$	15,656		$	8,054
Accounts receivable		14,912			12,307			14,912			12,307
Inventories		3,370			3,386			3,370			3,386
Other current assets		4,715			3,333			4,721			3,337
Commodity derivatives		48,298			49,484			48,298			49,484

Total current assets		86,750			76,431			86,957			76,568

PROPERTY, PLANT AND EQUIPMENT, AT COST:
Oil and gas properties, full cost method of accounting
Proved		1,866,415			1,868,441			1,866,415			1,868,441
Unproved		8,360			8,522			8,360			8,522
Accumulated depletion		(1,400,738	)		(1,409,110	)		(1,400,738	)		(1,409,110	)

Net oil and gas properties		474,037			467,853			474,037			467,853
Other property and equipment, net of accumulated depreciation and amortization of $14,566 and $15,015 at December 31, 2014 and March 31, 2015, respectively		14,477			14,071			14,477			14,071

Net property, plant and equipment		488,514			481,924			488,514			481,924

OTHER ASSETS:
Commodity derivatives		29,793			26,647			29,793			26,647
Deferred loan costs		7,128			6,962			11,614			11,186
Other		4,069			4,082			4,069			4,082

Total other assets		40,990			37,691			45,476			41,915

TOTAL ASSETS	$	616,254		$	596,046		$	620,947		$	600,407



LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	20,535		$	18,073		$	20,535		$	18,073
Interest payable		17,329			5,535			17,329			5,535
Share-based compensation		2,236			602			2,236			602

Total current liabilities		40,100			24,210			40,100			24,210
LONG-TERM DEBT		565,000			571,400			840,065			855,736

ASSET RETIREMENT OBLIGATIONS		30,351			30,848			30,351			30,848
SHARE-BASED COMPENSATION		648			731			648			731

Total liabilities		636,099			627,189			911,164			911,525

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY(DEFICIT):
Common stock, $.01 par value (200,000,000 shares authorized for Venoco and 100,000,000 authorized for DPC; 29,936,378 Venoco shares issued and outstanding at December 31, 2014 and March 31, 2015; 30,297,459 DPC shares issued and outstanding at December 31, 2014 and March 31, 2015)		299			299			303			303
Additional paid-in capital		285,120			285,616			73,902			74,398
Retained earnings (accumulated deficit)		(305,264	)		(317,058	)		(364,422	)		(385,819	)

Total stockholders' equity(deficit)		(19,845	)		(31,143	)		(290,217	)		(311,118	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)	$	616,254		$	596,046		$	620,947		$	600,407

See notes to condensed consolidated financial statements.

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~~PART I—FINANCIAL INFORMATION~~ VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT CORPORATION AND SUBSIDIARIES ~~CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except share amounts)~~

	Venoco, Inc.						Denver Parent Corporation
	December 31, 2013			September 30, 2014			December 31, 2013			September 30, 2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	828		$	14,786		$	17,336		$	15,166
Accounts receivable		23,737			18,868			23,780			18,750
Inventories		5,166			3,849			5,166			3,849
Other current assets		4,587			4,376			4,595			4,394
Commodity derivatives		340			2,164			340			2,164

Total current assets		34,658			44,043			51,217			44,323

PROPERTY, PLANT AND EQUIPMENT, AT COST:
Oil and gas properties, full cost method of accounting
Proved		1,991,644			2,067,242			1,991,644			2,067,242
Unproved		12,939			8,493			12,939			8,493
Accumulated depletion		(1,357,927	)		(1,391,864	)		(1,357,927	)		(1,391,864	)

Net oil and gas properties		646,656			683,871			646,656			683,871
Other property and equipment, net of accumulated depreciation and amortization of $14,859 and $14,876 at December 31, 2013 and September 30, 2014, respectively		15,973			14,803			15,973			14,803

Net property, plant and equipment		662,629			698,674			662,629			698,674

OTHER ASSETS:
Deferred loan costs		11,742			9,629			17,046			14,365
Commodity derivatives		—			171			—			171
Other		5,827			4,012			5,827			4,012

Total other assets		17,569			13,812			22,873			18,548

TOTAL ASSETS	$	714,856		$	756,529		$	736,719		$	761,545


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	—		$	765,000		$	—		$	1,031,226
Accounts payable and accrued liabilities		32,966			30,561			33,017			30,581
Interest payable		17,408			6,162			29,133			6,162
Commodity derivatives		13,464			2,161			13,464			2,161
Share-based compensation		20,723			3,048			20,723			3,048

Total current liabilities		84,561			806,932			96,337			1,073,178

LONG-TERM DEBT		705,000			—			953,501			—
COMMODITY DERIVATIVES		10,601			968			10,601			968
ASSET RETIREMENT OBLIGATIONS		35,982			38,562			35,982			38,562
SHARE-BASED COMPENSATION		16,721			10,048			16,721			10,048

Total liabilities		852,865			856,510			1,113,142			1,122,756

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value (200,000,000 shares authorized for Venoco and DPC; 29,936,378 Venoco shares issued and outstanding at December 31, 2013 and September 30, 2014; 30,150,933 and 30,297,459 DPC shares issued and outstanding at December 31, 2013 and September 30, 2014, respectively)		299			299			301			303
Additional paid-in capital		283,488			285,089			72,272			73,871
Retained earnings (accumulated deficit)		(421,796	)		(385,369	)		(448,996	)		(435,385	)

Total stockholders' equity		(138,009	)		(99,981	)		(376,423	)		(361,211	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	714,856		$	756,529		$	736,719		$	761,545

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands)

	Venoco, Inc.						Denver Parent Corporation

	Three Months Ended March 31,						Three Months Ended March 31,
	2014			2015			2014			2015
REVENUES:
Oil and natural gas sales	$	62,538		$	19,749		$	62,538		$	19,749
Other		459			669			459			669

Total revenues		62,997			20,418			62,997			20,418
EXPENSES:
Lease operating expense		19,468			14,932			19,468			14,932
Property and production taxes		1,736			2,132			1,736			2,132
Transportation expense		57			47			57			47
Depletion, depreciation and amortization		11,176			8,821			11,176			8,821
Accretion of asset retirement obligations		667			497			667			497
General and administrative, net of amounts capitalized		8,662			6,670			8,916			6,738

Total expenses		41,766			33,099			42,020			33,167

Income (loss) from operations		21,231			(12,681	)		20,977			(12,749	)

FINANCING COSTS AND OTHER:
Interest expense, net		12,940			11,411			21,123			20,682
Amortization of deferred loan costs		833			607			1,077			871
Commodity derivative losses (gains), net		(2,095	)		(12,905	)		(2,095	)		(12,905	)

Total financing costs and other		11,678			(887	)		20,105			8,648

Income (loss) before income taxes		9,553			(11,794	)		872			(21,397	)

Income tax provision (benefit)		—			—			—			—

Net income (loss)	$	9,553		$	(11,794	)	$	872		$	(21,397	)

See notes to condensed consolidated financial statements.

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT CORPORATION AND SUBSIDIARIES ~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands)~~

	Venoco, Inc.												Denver Parent Corporation
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2014			2013			2014			2013			2014			2013			2014
REVENUES:
Oil and natural gas sales	$	79,696		$	57,242		$	247,104		$	186,343		$	79,696		$	57,242		$	247,104		$	186,343
Other		1,249			609			3,463			1,544			1,249			609			3,463			1,544

Total revenues		80,945			57,851			250,567			187,887			80,945			57,851			250,567			187,887
EXPENSES:
Lease operating expense		18,274			18,225			54,719			55,878			18,274			18,225			54,719			55,878
Property and production taxes		(472	)		2,124			2,062			6,130			(472	)		2,124			2,062			6,130
Transportation expense		50			51			133			157			50			51			133			157
Depletion, depreciation and amortization		12,551			11,759			36,529			34,729			12,551			11,759			36,529			34,729
Impairment of oil and natural gas properties		—			—			—			817			—			—			—			817
Accretion of asset retirement obligations		595			629			1,866			1,852			595			629			1,866			1,852
General and administrative, net of amounts capitalized		5,358			1,352			30,708			19,004			5,389			1,403			30,869			19,394

Total expenses		36,356			34,140			126,017			118,567			36,387			34,191			126,178			118,957

Income from operations		44,589			23,711			124,550			69,320			44,558			23,660			124,389			68,930
FINANCING COSTS AND OTHER:
Interest expense, net		15,674			13,635			51,929			39,926			21,111			22,613			65,329			65,502
Amortization of deferred loan costs		868			887			2,887			2,583			1,150			1,151			3,722			3,338
Loss on extinguishment of debt		16,787			—			38,084			—			36,710			—			58,007			—
Commodity derivative losses (gains), net		14,171			(30,336	)		(2,437	)		(13,521	)		14,171			(30,336	)		(2,437	)		(13,521	)

Total financing costs and other		47,500			(15,814	)		90,463			28,988			73,142			(6,572	)		124,621			55,319

Income (loss) before income taxes		(2,911	)		39,525			34,087			40,332			(28,584	)		30,232			(232	)		13,611
Income tax provision (benefit)		—			—			—			—			—			—			—			—

Net income (loss)	$	(2,911	)	$	39,525		$	34,087		$	40,332		$	(28,584	)	$	30,232		$	(232	)	$	13,611

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED)

(In thousands)

VENOCO, INC. AND SUBSIDIARIES

	Common Stock						Retained Earnings (Accumulated Deficit)

	Common Stock				Additional Paid-in Capital
	Shares		Amount		Additional Paid-in Capital					Total
BALANCE AT DECEMBER 31, 2014		29,936	$	299	$	285,120	$	(305,264	)	$	(19,845	)
Excess of share-based compensation expense recognized over payments made		—		—		496		—			496
Net income (loss)		—		—		—		(11,794	)		(11,794	)

BALANCE AT MARCH 31, 2015		29,936	$	299	$	285,616	$	(317,058	)	$	(31,143	)

DENVER PARENT CORPORATION AND SUBSIDIARIES

	Common Stock						Retained Earnings (Accumulated Deficit)

	Common Stock				Additional Paid-in Capital
	Shares		Amount		Additional Paid-in Capital					Total
BALANCE AT DECEMBER 31, 2014		30,297	$	303	$	73,902	$	(364,422	)	$	(290,217	)
Excess of share-based compensation expense recognized over payments made		—		—		496		—			496
Net income (loss)		—		—		—		(21,397	)		(21,397	)

BALANCE AT MARCH 31, 2015		30,297	$	303	$	74,398	$	(385,819	)	$	(311,118	)

See notes to condensed consolidated financial statements.

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT CORPORATION AND SUBSIDIARIES ~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY~~ ~~(UNAUDITED) (In thousands)~~

~~VENOCO, INC.~~CONDENSED ~~AND~~CONSOLIDATED ~~SUBSIDIARIES~~STATEMENTS OF CASH FLOWS (UNAUDITED)

	Common Stock						Retained Earnings (Accumulated Deficit)
					Additional Paid-in Capital
	Shares		Amount							Total
BALANCE AT DECEMBER 31, 2013		29,936	$	299	$	283,488	$	(421,796	)	$	(138,009	)
Excess of share-based compensation expense recognized over payments made		—		—		1,601		—			1,601
Dividend to DPC		—		—		—		(3,905	)		(3,905	)
Net income (loss)		—		—		—		40,332			40,332

BALANCE AT SEPTEMBER 30, 2014		29,936	$	299	$	285,089	$	(385,369	)	$	(99,981	)

(In thousands)

DENVER PARENT CORPORATION AND SUBSIDIARIES

	Venoco, Inc.						Denver Parent Corporation

	Three Months Ended March 31,						Three Months Ended March 31,
	2014			2015			2014			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	9,553		$	(11,794	)	$	872		$	(21,397	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation and amortization		11,176			8,821			11,176			8,821
Accretion of asset retirement obligations		667			497			667			497
Share-based compensation		1,600			496			1,600			496
Interest paid-in-kind		—			—			3,065			8,974
Amortization of deferred loan costs		833			607			1,077			871
Amortization of bond discounts and other		—			—			261			297
Unrealized commodity derivative (gains) losses and amortization of premiums		(5,620	)		1,960			(5,620	)		1,960
Changes in operating assets and liabilities:
Accounts receivable		5,025			2,605			5,171			2,605
Inventories		431			(16	)		431			(16	)
Other current assets		1,123			1,350			1,058			1,350
Other assets		216			(13	)		216			(13	)
Accounts payable and accrued liabilities		(6,767	)		(13,624	)		(17,548	)		(13,624	)
Share-based compensation liabilities		(13,950	)		(1,551	)		(13,950	)		(1,551	)

Net cash provided by (used in) operating activities		4,287			(10,662	)		(11,524	)		(10,730	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for oil and natural gas properties		(26,182	)		(4,596	)		(26,182	)		(4,596	)
Acquisitions of oil and natural gas properties		(16	)		(10	)		(16	)		(10	)
Expenditures for other property and equipment		(177	)		(43	)		(177	)		(43	)
Proceeds provided by sale of oil and natural gas properties		—			1,786			—			1,786

Net cash provided by (used in) investing activities		(26,375	)		(2,863	)		(26,375	)		(2,863	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt		97,000			15,000			97,000			15,000
Principal payments on long-term debt		(55,000	)		(8,600	)		(55,000	)		(8,600	)
Payments for deferred loan costs		(13	)		(409	)		(17	)		(409	)
Dividend to Denver Parent Corporation		(3,905	)		—			—			—

Net cash provided by (used in) financing activities		38,082			5,991			41,983			5,991

Net (decrease) increase in cash and cash equivalents		15,994			(7,534	)		4,084			(7,602	)
Cash and cash equivalents, beginning of period		828			15,455			17,336			15,656

Cash and cash equivalents, end of period	$	16,822		$	7,921		$	21,420		$	8,054



Supplemental Disclosure of Cash Flow Information—
Cash paid for interest	$	24,322		$	23,187		$	39,941		$	23,187
Cash paid (received) for income taxes	$	—		$	—		$	—		$	—
Supplemental Disclosure of Noncash Activities—
(Decrease) increase in accrued capital expenditures	$	80		$	(632	)	$	80		$	(632	)
Excess of share-based compensation expense recognized over payments made	$	—		$	496		$	—		$	496

	Common Stock							Retained Earnings (Accumulated Deficit)
					Additional Paid-in Capital
	Shares		Amount								Total
BALANCE AT DECEMBER 31, 2013		30,151	$	301	$	72,272		$	(448,996	)	$	(376,423	)
Excess of share-based compensation expense recognized over payments made		—		—		1,601			—			1,601
ESOP Issuance		146		2		(2	)		—			—
Net income (loss)		—		—		—			13,611			13,611

BALANCE AT SEPTEMBER 30, 2014		30,297	$	303	$	73,871		$	(435,385	)	$	(361,211	)

See notes to condensed consolidated financial statements.

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)

	Venoco, Inc.						Denver Parent Corporation
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2013			2014			2013			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	34,087		$	40,332		$	(232	)	$	13,611
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation and amortization		36,529			34,729			36,529			34,729
Impairment of oil and natural gas properties		—			817			—			817
Accretion of asset retirement obligations		1,866			1,852			1,866			1,852
Share-based compensation		—			1,601			—			1,601
Interest paid-in-kind		—			—			5,005			16,916
Amortization of deferred loan costs		2,887			2,583			3,722			3,338
Loss on extinguishment of debt		38,084			—			58,007			—
Amortization of bond discounts and other		698			—			822			809
Unrealized commodity derivative (gains) losses and amortization of premiums		(26,447	)		(22,931	)		(26,447	)		(22,931	)
Changes in operating assets and liabilities:
Accounts receivable		9,368			4,869			9,711			5,030
Inventories		(279	)		1,317			(279	)		1,317
Other current assets		(1,027	)		112			(1,037	)		40
Other assets		(1,715	)		1,815			(1,783	)		1,815
Accounts payable and accrued liabilities		(30,190	)		(8,128	)		(26,249	)		(19,884	)
Share-based compensation liabilities		(503	)		(24,348	)		(503	)		(24,348	)
Net premiums paid on derivative contracts		(1,494	)		—			(1,494	)		—

Net cash provided by operating activities		61,864			34,620			57,638			14,712

CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for oil and natural gas properties		(78,628	)		(75,836	)		(78,628	)		(75,836	)
Acquisitions of oil and natural gas properties		(45	)		(38	)		(45	)		(38	)
Expenditures for other property and equipment		(2,243	)		(512	)		(2,243	)		(512	)
Proceeds from sale of oil and natural gas properties		100,305			—			100,305			—

Net cash provided by (used in) investing activities		19,389			(76,386	)		19,389			(76,386	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt		399,900			182,000			648,025			182,000
Principal payments on long-term debt		(656,379	)		(122,000	)		(721,384	)		(122,000	)
Premium for early retirement of debt		(19,905	)		—			(36,626	)		—
Payments for deferred loan costs		(1,247	)		(371	)		(7,219	)		(496	)
Going private share repurchase costs		(9	)		—			(9	)		—
Dividend paid to Denver Parent Corporation		(15,800	)		(3,905	)		—			—
Denver Parent Corporation capital contribution		158,385			—			3,108			—

Net cash provided by (used in) financing activities		(135,055	)		55,724			(114,105	)		59,504

Net (decrease) increase in cash and cash equivalents		(53,802	)		13,958			(37,078	)		(2,170	)
Cash and cash equivalents, beginning of period		53,818			828			54,318			17,336

Cash and cash equivalents, end of period	$	16		$	14,786		$	17,240		$	15,166


Supplemental Disclosure of Cash Flow Information—
Cash paid for interest	$	72,775		$	51,172		$	77,195		$	70,749
Cash paid (received) for income taxes	$	—		$	—		$	—		$	—
Supplemental Disclosure of Noncash Activities—
(Decrease) increase in accrued capital expenditures	$	(7,174	)	$	(3,823	)	$	(7,174	)	$	(3,823	)

See notes to condensed consolidated financial statements.

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. ~~ORGANIZATION AND~~ SIGNIFICANT ACCOUNTING POLICIES

Description of Operations Denver Parent Corporation, a Delaware corporation ("DPC"), was formed in January 2012 for the purpose of acquiring all of the outstanding common stock of Venoco, Inc., a Delaware corporation ("Venoco"), in a transaction referred to as the "going private transaction". The going private transaction was completed in October 2012. DPC has no operations and no material assets other than 100% of the common stock of Venoco. Venoco is engaged in the acquisition, exploration, exploitation and development of oil and natural gas properties with a focus on properties offshore and onshore in California.

Basis of Presentation In 2011, Venoco's board of directors received a proposal from its then-chairman and chief executive officer, Timothy Marquez, to acquire all of the outstanding shares of common stock of Venoco of which he was not the beneficial owner for $12.50 per share in cash. On October 3, 2012, Mr. Marquez and certain of his affiliates, including DPC, completed the going private transaction and acquired all of the outstanding stock of Venoco. As a result, Venoco's common stock is no longer publicly traded and Venoco is a wholly owned subsidiary of DPC. DPC is majority-owned and controlled by Mr. Marquez and his affiliates.

This Quarterly Report on Form 10-Q is a combined report being filed by DPC and Venoco. Unless otherwise indicated or the context otherwise requires, (i) references to "DPC" refer only to DPC, (ii) references to the "Company," "we," "our" and "us" refer, for periods following the going private transaction, to DPC and its subsidiaries, including Venoco and its subsidiaries, and for periods prior to the going private transaction, to Venoco and its subsidiaries and (iii) references to "Venoco" refer to Venoco and its subsidiaries. Each registrant included herein is filing on its own behalf all of the information contained in this report that pertains to such registrant. When appropriate, disclosures specific to DPC and Venoco are identified as such. Each registrant included herein is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information. Where the information provided is substantially the same for both companies, such information has been combined. Where information is not substantially the same for both companies, we have provided separate information. In addition, separate financial statements for each company are included in this report.

The unaudited condensed consolidated financial statements include the accounts of DPC and its subsidiaries, and Venoco and its subsidiaries. All such subsidiaries are wholly owned. The financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all material adjustments considered necessary for a fair presentation of the Company's interim results have been reflected. All such adjustments are considered to be of a normal recurring nature. The Company has evaluated subsequent events and transactions for matters that may require recognition or disclosure in the financial statements. The Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014 for Venoco and DPC includes certain definitions and a summary of significant accounting policies and should be read in conjunction with this report. The results for interim periods are not necessarily indicative of annual results.

In the course of preparing the condensed consolidated financial statements, management makes various assumptions, judgments and estimates to determine the reported amount of assets, liabilities, revenue and expenses, and in the disclosures of commitments and contingencies. Changes in these

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CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

1. ~~ORGANIZATION AND~~ SIGNIFICANT ACCOUNTING POLICIES (Continued)

assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events and, accordingly, actual results could differ from amounts initially established. Significant areas requiring the use of assumptions, judgments and estimates include (1) oil and gas reserves; (2) cash flow estimates used in ceiling tests of oil and natural gas properties; (3) depreciation, depletion and amortization; (4) asset retirement obligations; (5) assigning fair value and allocating purchase price in connection with business combinations; (6) accrued revenue and related receivables; (7) valuation of commodity derivative instruments; (8) accrued liabilities; (9) valuation of share-based payments and (10) income taxes. Although management believes these estimates are reasonable, actual results could differ from these estimates.

No Liquidity The additional indebtedness that the Company incurred in connection with the going private transaction and the ~~condensed~~associated ~~consolidated~~financial covenants ~~statement~~in ofVenoco's ~~comprehensive~~revolving ~~income~~credit facility (~~loss~~which was subsequently paid down in April 2015) ishave ~~presented~~increased ~~because~~debt-related risks. We have undertaken a variety of measures to reduce our indebtedness, including in particular sales of our Sacramento Basin and West Montalvo properties for an aggregate price of approximately $450 million. However, our deleveraging efforts have been impacted by various operational issues, including an extended shutdown of the ~~Company~~pipeline ~~had~~that notransports ~~comprehensive~~our ~~income~~South orEllwood ~~loss~~field ~~activity~~production in 2014 and apparent communication issues affecting production from some of our wells in the ~~periods~~same ~~presented~~field. More recently, our deleveraging efforts have also been affected by the dramatic decline in the price of oil that occurred over the second half of 2014 with prices remaining low in and the first quarter of 2015. Prior to the termination of Venoco's revolving credit facility in April 2015, we were required to obtain numerous amendments to and waivers from the lenders under the facility as a result of these factors. We may be forced to seek further amendments or waivers from current or future lenders, and there is no assurance that we will be able to obtain them in a timely manner or at all. We are currently exploring additional deleveraging efforts and have significantly curtailed our planned capital expenditures for 2015 relative to prior years.

~~Liquidity~~Income Taxes The ~~additional indebtedness that the~~ Company ~~incurred~~computes inits ~~connection~~quarterly ~~with~~taxes ~~the~~under ~~going private transaction and~~ the ~~associated~~ ~~financial covenants~~effective intax ~~Venoco's~~rate ~~revolving~~method ~~credit~~based ~~facility~~on ~~have~~applying ~~increased~~an ~~debt-related risks. The agreement governing the revolving credit facility requires, among other things, that Venoco maintain a specified~~anticipated ~~minimum~~annual ~~ratio~~effective ofrate ~~current assets~~ to its ~~current liabilities and a specified maximum ratio of secured debt~~ year-to-date ~~EBITDA.~~income Inor ~~addition~~loss, ~~until~~except ~~October 2014, the agreement required that Venoco maintain a maximum debt to EBITDA ratio that varied over time. See note 2~~ for ~~more~~discrete ~~information regarding the revolving credit agreement~~items. AsIncome ~~disclosed~~taxes ~~in our Quarterly Report on Form 10-Q~~ for ~~the~~discrete ~~quarter ended~~items ~~June 30,~~are ~~2014,~~computed at the time that report was filed, we projected that Venoco would be out of compliance with the debt to EBITDA ratio covenant as of September 30, 2014. Because this non-compliance would have allowed the revolving credit facility lenders to accelerate the indebtedness under the facility, and ~~that~~recorded ~~acceleration would have then allowed the holders of both Venoco's and DPC's senior notes to accelerate the indebtedness represented by those notes, the consolidated balance sheet of Venoco included~~ in ~~that report reflected all of~~ the ~~amounts~~period ~~outstanding under the revolving credit facility and the Venoco 8.875% senior notes as current liabilities as of June 30, 2014. For the same reasons, the balance sheet of DPC included~~ in ~~that~~which ~~report reflected that indebtedness, plus~~ the ~~DPC~~specific ~~12.25%~~transaction ~~/ 13~~occurs.~~00%~~ ~~senior PIK toggle notes, as current liabilities as of June 30, 2014.~~

OnAs ~~August~~of December 1831, 2014, ~~Venoco~~DPC ~~entered~~has ~~into~~net aoperating ~~purchase~~loss ~~and~~carryovers ~~sale~~("NOLs") ~~agreement~~of $499 million for ~~the~~federal ~~sale~~income oftax ~~its~~purposes ~~West~~and ~~Montalvo properties for~~ $~~200~~459 million for financial reporting purposes, ~~subject~~and toVenoco ~~certain~~has ~~adjustments.~~net ~~On October~~NOLs as of December 1531, 2014, ~~Venoco~~of ~~entered~~$418 million ~~into~~for anfederal ~~amendment~~income totax ~~its~~purposes ~~revolving~~and ~~credit~~$377 million ~~facility~~for ~~that,~~financial ~~among~~reporting ~~other~~purposes. ~~things,~~The ~~(i) eliminated~~difference between the ~~debt-to-EBITDA~~federal ~~covenant~~income ~~and~~tax ~~(ii) reduced~~NOLs and the ~~borrowing~~ ~~base~~financial ~~under~~reporting ~~the~~NOLs ~~facility~~of to $9040 million, ~~effective~~relates ~~upon~~to ~~completion~~tax ofdeductions ~~the~~for ~~West~~compensation ~~Montalvo~~expense ~~sale.~~for ~~The~~financial ~~sale~~reporting ~~was~~purposes ~~completed~~for onwhich ~~October 29,~~the ~~2014,~~benefit ~~and~~will ~~Venoco~~not ~~used~~be recognized until the ~~sale~~related ~~proceeds~~deductions ~~of $200~~reduce taxes payable.~~2 million~~ toThe ~~reduce~~net ~~amounts~~operating ~~outstanding~~loss ~~under~~carryovers may be carried back two years and forward twenty years from the ~~facility~~year tothe ~~approximately~~net ~~$65 million~~operating loss was generated. ~~Final~~The ~~sales~~net ~~proceeds~~operating ~~are~~losses ~~subject~~may be used to ~~customary~~offset ~~post-closing~~taxable ~~adjustments~~income through 2034.

~~Since~~Venoco ~~the~~has ~~filing~~incurred oflosses ~~our~~before ~~Quarterly~~income ~~Report~~taxes onin ~~Form 10-Q for the quarter ended June 30~~2008, ~~2014~~2009, ~~oil~~and ~~prices~~2012 ~~have~~as ~~declined~~well ~~significantly.~~as ~~Due~~taxable ~~primarily~~losses toin ~~those~~each ~~declines, we currently project that Venoco will be out~~ of ~~compliance with~~ the ~~secured~~tax ~~debt~~years tofrom ~~EBITDA~~2008 ~~covenant~~through ~~in its revolving credit facility as of September 30, 2015~~2013. ~~For the reasons discussed above with respect to the previously anticipated September 30, 2014 breach of the debt to EBITDA covenant, the indebtedness under the credit facility and Venoco's and~~ DPC's ~~senior~~has ~~notes~~incurred ~~are~~losses ~~reflected~~before asincome ~~current~~taxes ~~liabilities~~in ~~as of September 30~~2008, ~~2014 in the~~

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

1. ~~ORGANIZATION AND~~ SIGNIFICANT ACCOUNTING POLICIES (Continued)

~~applicable~~2009, ~~balance sheets included in this report. In addition~~2012, ~~due~~2013 toand ~~the~~2014 ~~resulting~~as ~~increase~~well ~~in Venoco's current liabilities~~ as oftaxable ~~September 30,~~losses ~~2014,~~in ~~Venoco~~each ~~would have been out~~ of ~~compliance with~~ the ~~current~~tax ~~assets~~years tofrom ~~current~~2008 ~~liabilities~~through ~~ratio covenant as of that date had that breach not been waived pursuant to the October 15,~~ 2014 ~~amendment~~. ~~The~~These ~~amendment~~losses ~~did~~and ~~not~~expected ~~waive~~future ~~any prospective~~taxable ~~breaches~~losses ofwere ~~that~~a ~~covenant,~~key ~~and,~~consideration ~~because~~that weled ~~expect~~Venoco toand ~~continue~~DPC to provide ~~classify~~a ~~Venoco's~~full ~~credit~~valuation ~~facility~~allowance ~~and~~against ~~senior~~its ~~notes~~net ~~indebtedness~~deferred astax ~~current~~assets as of December 31, 2014, weand ~~expect~~March 31,2015, ~~such~~since ~~a breach~~it tocannot ~~occur~~conclude ~~as of~~ that ~~date.~~it Inis ~~the~~more ~~event~~likely ~~that~~than wenot ~~are unable to obtain an amendment or waiver of the revolving credit facility to address~~ that ~~breach,~~its ~~and other actual or potential future breaches~~net ~~that~~deferred ~~may~~tax ~~occur,~~assets ~~our~~will ~~creditors could elect to declare some or all of our debt to~~ be ~~immediately~~fully ~~due~~realized ~~and~~on ~~payable~~future ~~and~~income ~~the~~tax ~~lenders under the revolving credit facility could elect to terminate their commitments and cease making further loans~~returns.

~~Income Taxes~~ The ultimate ~~Company~~realization ~~computes~~of ~~its~~deferred ~~quarterly~~tax ~~taxes~~assets ~~under~~is dependent upon the ~~effective~~generation of future taxable income during the periods in which those temporary differences become deductible. At each reporting period, management considers the scheduled reversal of deferred tax ~~rate~~liabilities, ~~method~~available ~~based~~taxes onin ~~applying~~carryback anperiods, ~~anticipated~~tax planning strategies and projected future taxable income in ~~annual~~making ~~effective~~this ~~rate~~assessment. Future events or new evidence which may lead the Company to conclude that it is more likely than not that its ~~year-~~net deferred tax assets will be realized include, but are not limited to, cumulative historical pre-~~date~~tax ~~income~~earnings; consistent and sustained pre-tax earnings; sustained or ~~loss~~continued improvements in oil and natural gas commodity prices; meaningful incremental oil production and proved reserves from the Company's development efforts at its Southern California legacy properties; consistent, ~~except~~meaningful ~~for~~production ~~discrete~~and ~~items.~~proved ~~Income~~reserves ~~taxes~~from ~~for~~the ~~discrete~~Company's ~~items~~onshore Monterey ~~are~~shale ~~computed~~project; meaningful production and ~~recorded~~proved inreserves from the ~~period~~CO2 inproject ~~which~~at the ~~specific~~Hastings ~~transaction~~Complex; ~~occurs~~and taxable events resulting from one or more deleveraging transactions. The Company will continue to evaluate whether the valuation allowance is needed in future reporting periods.

As of December 31, 2013, DPC and Venoco have net operating loss carryovers ("NOLs") for federal income tax purposes of $502 million and $457 million, respectively. DPC has incurred losses before income taxes in 2008, 2009, 2012 and 2013 as well as taxable losses in each of the tax years from 2008 through 2013. Venoco has incurred losses before income taxes in 2008, 2009, and 2012 as well as taxable losses in each of the tax years from 2008 through 2013. These losses and expected future taxable losses were a key consideration that led each of Venoco and DPC to provide a full valuation allowance against its net deferred tax assets as of December 31, 2013 and September 30, 2014, since it cannot conclude that it is more likely than not that its net deferred tax assets will be fully realized on future income tax returns.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. At each reporting period, management considers the scheduled reversal of deferred tax liabilities, available taxes in carryback periods, tax planning strategies and projected future taxable income in making this assessment. Future events or new evidence which may lead the Company to conclude that it is more likely than not that its net deferred tax assets will be realized include, but are not limited to, cumulative historical pre-tax earnings; consistent and sustained pre-tax earnings; sustained or continued improvements in oil prices; meaningful incremental oil production and proved reserves from the Company's development efforts at its Southern California legacy properties; meaningful production and proved reserves from the CO2 project at the Hastings Complex; and taxable events resulting from one or more deleveraging transactions. The Company will continue to evaluate whether the valuation allowance is needed in future reporting periods.

As long as the Company concludes that it will continue to have a need for a full valuation allowance against its net deferred tax assets, the Company likely will not have any income tax expense or benefit other than for federal alternative minimum tax expense, a release of a portion of the valuation allowance for net operating loss carryback claims or for state income taxes.

12 Reclassifications Certain amounts in prior years footnotes to the financials have been reclassified to 2015 presentation. Reclassified amounts were not material to the financials presentation.

Recently Issued Accounting Standards In May 2014, the FASB issued new authoritative accounting guidance related to the recognition of revenue. This authoritative accounting guidance is effective for the annual period beginning after December 15, 2016, including interim periods within that reporting period, and is to be applied using one of two acceptable methods. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's consolidated financial statements and disclosures.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern, which requires management to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and provide related footnote disclosures. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued. The standard allows for either a full retrospective or modified retrospective transition method. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's consolidated financials.

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

1. ~~ORGANIZATION AND~~ SIGNIFICANT ACCOUNTING POLICIES (Continued)

~~Recently Issued Accounting Standards~~ In April ~~May 2014~~2015, the FASB issued ~~new~~ASU ~~authoritative~~2015-03 ~~accounting guidance related~~ to revise the ~~recognition~~ presentation of ~~revenue~~debt issuance costs. ~~This~~Under ASU 2015-03, entities will present debt issuance costs in their balance sheet as a ~~authoritative~~direct ~~accounting~~deduction from the related debt liability rather than as an asset. Amortization of the deferred costs will continue to be included in interest expense. The guidance is effective for ~~the~~ annual ~~period~~and interim reporting periods beginning on or after December 15, ~~2016,~~2015. ~~including~~Early ~~interim~~adoption ~~periods~~is ~~within~~permitted for financial statements that ~~reporting~~have ~~period,~~not ~~and~~been ispreviously toissued. beThe ~~applied~~standard ~~using~~will ~~one~~be ofapplied ~~two~~retrospectively ~~acceptable~~to ~~methods~~all prior periods. The ~~Company~~company is currently evaluating ~~the~~ provisions of this guidance and assessing its impact on the Company's consolidated ~~financial statements and disclosures~~financials.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern, which requires management to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and provide related footnote disclosures. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued. The standard allows for either a full retrospective or modified retrospective transition method. The Company does not expect this standard to have a material impact on the Company's financial statements upon adoption.

2. DEBT

As of the dates indicated, the Company's long-term debt consisted of the following (in thousands):

	Venoco, Inc.				Denver Parent Corporation
	December 31, 2013		September 30, 2014		December 31, 2013		September 30, 2014
	December 31, 2014		March 31, 2015		December 31, 2014		March 31, 2015
Revolving credit agreement due March 2016	$	205,000	$	265,000	$	205,000	$	265,000
Venoco Revolving credit agreement due March 2016	$	65,000	$	71,400	$	65,000	$	71,400
8.875% senior notes due February 2019 (face value $500,000)		500,000		500,000		500,000		500,000
Venoco 8.875% senior notes due February 2019 (face value $500,000)		500,000		500,000		500,000		500,000
12.25% / 13.00% senior PIK toggle notes due August 2018		—		—		248,501		266,226
DPC 12.25% / 13.00% senior PIK toggle notes due August 2018		—		—		275,065		284,336

Total long-term debt		~~705~~565,000		~~765~~571,~~000~~400		~~953~~840,~~501~~065		1855,~~031,226~~736
Less: current portion of long-term debt		—		~~765,000~~—		—		~~1,031,226~~—

Long-term debt, net of current portion	$	~~705~~565,000	$	0571,400	$	~~953~~840,~~501~~065	$	0855,736

~~The~~We ~~following~~recently ~~summarizes~~completed a series of financing transactions in response to our indebtedness and liquidity situation. On April 2, 2015, Venoco entered into agreements relating to three new debt instruments: (i) first lien senior secured notes with an aggregate principal amount of $175 million (the ~~terms~~"first lien secured notes"), (ii) second lien senior secured notes with an aggregate principal amount of $150 million (the ~~agreements~~"second ~~governing~~lien secured notes") and (iii) a $75 million cash collateralized senior secured credit facility (the "term ~~Company~~loan facility"). Approximately $72 million of proceeds from the issuance of the first lien secured notes and the term loan facility were used to repay all amounts outstanding under Venoco's ~~debt~~revolving credit facility, which was then terminated. The second lien secured notes were issued in exchange for $194 million aggregate principal amount of, and accrued interest on, Venoco's outstanding as8.875% senior notes due 2019. The terms of ~~September 30~~the new debt instruments are summarized in "—Liquidity and Capital Resources—Capital Resources and Requirements." These transactions increased our indebtedness overall, ~~2014~~but reduced our near-term cash interest expense and provided us with flexibility and additional liquidity that we intend to use to advance longer term projects.

~~Venoco Revolving Credit Facility. Venoco is party to a fifth amended and restated credit agreement which governs its revolving credit facility.~~ The ~~credit~~following ~~facility~~summarizes ~~has~~the aterms ~~maximum size~~ of ~~$500 million and a maturity date of March 31, 2016. The borrowing base, which is subject to redetermination twice each year, and may be redetermined at other times at Venoco's request or at~~ the ~~request~~agreements ofgoverning the ~~lenders, is currently $90 million. The credit facility is secured by a first priority lien on substantially all of Venoco~~Company's ~~oil~~debt ~~and natural~~outstanding ~~gas~~as ~~properties and other assets, including the equity interests in all~~ of ~~its subsidiaries, and is unconditionally guaranteed by each of those subsidiaries other than Ellwood Pipeline,~~March ~~Inc. The collateral also secures Venoco's obligations to hedging counterparties that are also lenders~~31, ~~or affiliates of lenders, under the facility~~2015. ~~Loans made under the revolving credit facility are designated, at our option, as either "Base Rate Loans" or "LIBO Rate Loans." Loans designated as Base Rate Loans~~

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(UNAUDITED)

2. DEBT (Continued)

Venoco Revolving Credit Facility. Prior to its refinancing and termination in April 2015, Venoco was party to a fifth amended and restated credit agreement which governed its revolving credit facility. The credit facility had a maximum size of $500 million and a maturity date of March 31, 2016. The borrowing base, which was subject to redetermination twice each year, and was subject to redetermination at other times at Venoco's request or at the request of the lenders, was $88.5 million as of March 31, 2015. The credit facility was secured by a first priority lien on substantially all of Venoco's oil and natural gas properties and other assets, including the equity interests in all of its subsidiaries, and was unconditionally guaranteed by each of those subsidiaries other than Ellwood Pipeline, Inc. The collateral also secured Venoco's obligations to hedging counterparties that were also lenders, or affiliates of lenders, under the facility. Loans made under the revolving credit facility were designated, at our option, as either "Base Rate Loans" or "LIBO Rate Loans." Loans designated as Base Rate Loans under the facility ~~bear~~bore interest at a floating rate equal to (i) the greater of (x) the administrative agent's announced prime rate, (y) the federal funds rate plus 0.50% and (z) the one-month LIBOR plus 1.0%, plus (ii) an applicable margin ranging from 1.25% to 2.00%, based on utilization. Loans designated as LIBO Rate Loans under the facility ~~bear~~bore interest at (i) LIBOR plus (ii) an applicable margin ranging from 2.25% to 3.00%, based upon utilization. The applicable margin for both Base Rate Loans and LIBO Rate Loans ~~will~~was be increased by 0.50% inwhen ~~the event that~~ Venoco's debt to adjusted EBITDA ratio ~~exceeds~~exceeded 3.75 to 1.00 on the last day of each of the two fiscal quarters most recently ended. A commitment fee of 0.50% per annum is was payable with respect to unused borrowing availability under the facility. The agreement governing the facility ~~contains~~contained customary representations, warranties, events of default, indemnities ~~and~~ and covenants, including operational covenants that ~~restrict~~restricted Venoco's ability to incur indebtedness and financial covenants that require Venoco to maintain specified ratios of current assets to current liabilities, secured debt to EBITDA and interest coverage. In April 2014, the Company entered into an amendment to the revolving credit agreement pursuant to which, among other things, certain ~~financial~~ covenants were changed and the borrowing base under the facility increased from $270 million to $280 million. The Company entered into an additional amendment to the agreement in October 2014 pursuant to which, among other things, the debt to EBITDA ratio covenant was eliminated, certain other financial covenants ~~were changed and the borrowing base was reduced to $90 million, effective upon completion of the Company's sale of its West Montalvo properties~~.

The borrowing base under the revolving credit facility ~~has~~was ~~been~~ allocated at various percentages to a syndicate of banks. As of ~~November~~March 1931, ~~2014~~2015, Venoco had approximately $6571.4 million outstanding on the facility and had available borrowing capacity of $2013.5 million under the facility, net of the outstanding balance and $3.6 million in outstanding letters of credit.

The revolving credit facility generally ~~permits~~permitted Venoco, subject to certain conditions, to pay cash dividends to DPC up to a maximum amount of $35 million in a four-quarter ~~period~~ period on a rolling basis. Venoco paid cash dividends of $~~15.8 million and $~~3.9 million to DPC in ~~September 2013 and~~ February 2014~~, respectively~~.

Venoco 8.875% Senior Notes. In February 2011, Venoco issued $500 million in 8.875% senior notes due in February 2019 at par. The notes pay interest semi-annually in arrears on February 15 and August 15 of each year. Venoco may redeem the notes prior to February 15, 2015 at a "make whole premium" defined in the indenture. Beginning February 15, 2015, Venoco may redeem the notes at a redemption price of 104.438% of the principal amount and declining to 100% by February 15, 2017. The notes are senior unsecured obligations and contain operational covenants that, among other things, limit Venoco's ability to make investments, incur additional indebtedness, issue preferred stock, pay dividends, repurchase its stock, create liens or sell assets.

DPC 12.25% / 13.00% Senior PIK Toggle Notes. In August 2013, DPC issued $255 million principal amount of 12.25% / 13.00% senior ~~PIK~~ PIK toggle notes due August 2018 at 97.304% of par. Interest on the notes is payable on February 15 and August 15 of each year, commencing February 15, 2014. The initial interest payment on the notes was required to be paid in cash. The August 2014 interest payment was paid 25% in cash and 75% PIK interest. DPC is a holding company that owns no material assets other than stock of Venoco; accordingly, it will be able to pay cash interest on its notes only to the

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(UNAUDITED)

2. DEBT (Continued)

~~extent~~2014. ~~that~~The itinitial ~~receives~~interest ~~cash~~payment ~~dividends~~on orthe ~~distributions~~notes ~~from~~was ~~Venoco~~required to be paid in cash. For each interest period after the initial interest period (other than for the final interest period ending at the stated maturity, which will be paid in cash), DPC will, in certain circumstances, be permitted to pay interest on the notes by increasing the principal amount of the notes or issuing new notes (collectively, "PIK interest"). Cash interest on the notes accrues at the rate of 12.25% per annum. PIK interest on the notes accrues at the rate of 13.00% per annum until the next payment of cash interest. The August 2014 interest payment was paid 25% in cash and 75% PIK interest, and the February 2015 interest payment was paid entirely as PIK interest. DPC is a holding company that owns no material assets other than stock of Venoco; accordingly, it will be able to pay cash interest on its notes ~~are~~only to the extent that it receives cash dividends or distributions from Venoco. The notes are not currently guaranteed by any of DPC's subsidiaries. DPC may redeem the notes, in whole or in part, at any time prior to August 15, 2015, at a "make-whole" redemption price described in ~~the~~ the indenture. DPC may also redeem all or any part of the notes on and after August 15, 2015 at a redemption price of 106.125% of the principal amount and declining to 100% by August 15, 2017. The notes are senior unsecured obligations and contain operational covenants that, among other things, limit our ability to make investments, incur additional indebtedness, issue preferred stock, pay dividends, repurchase stock, create liens or sell assets.

The Company was in compliance with all debt covenants at March 31, 2015.

3. HEDGING AND DERIVATIVE FINANCIAL INSTRUMENTS

Commodity Derivative Agreements. The Company utilizes swap and collar agreements and option contracts in an effort to hedge the effect of ~~price~~commodity price changes on ~~a portion of~~ its ~~future~~cash ~~oil production~~flows. The objective of the Company's hedging activities and the use of derivative financial instruments is to achieve more predictable cash flows. While the use of ~~these~~ these derivative instruments limits the downside risk of adverse price movements, they also may limit future ~~revenues~~cash flows from favorable price movements. The Company may, from time to time, ~~opportunistically~~ opportunistically restructure existing derivative contracts or enter into new transactions to effectively modify the terms of current contracts in order to improve the pricing parameters in existing contracts or realize the current value of the Company's existing positions. The Company may use the proceeds from such transactions to secure additional contracts for periods in which the Company believes it has additional unmitigated commodity price risk or for other corporate purposes.

The ~~Company's~~use ~~derivative~~of ~~contracts~~derivatives ~~generally~~involves ~~provide for monthly settlement based on~~ the ~~difference~~risk ~~between~~that ~~a fixed price established in~~ the ~~derivative~~counterparties ~~contract~~to ~~and~~such ainstruments ~~benchmark~~will ~~price, typically~~be ~~either~~unable ~~Inter-Continental~~to ~~Exchange~~meet ~~Brent ("Brent") or WTI. Historically,~~ the ~~two~~financial ~~price~~terms ~~indexes~~of ~~have~~such ~~frequently~~contracts. ~~demonstrated~~The aCompany ~~close~~generally ~~correlation~~has ~~with~~netting arrangements ~~each other and~~ with the ~~Southern California~~counterparties ~~indexes~~that onprovide ~~which~~for the ~~Company~~offset ~~sells a significant percentage~~ of ~~its~~payables ~~oil.~~against ~~The~~receivables ~~Company~~from ~~cannot~~separate ~~predict~~derivative ~~how~~arrangements ~~the~~with ~~differential~~that ~~between~~counterparty ~~Brent (or WTI) and the Southern California indexes applicable to our production will change~~ in the ~~future,~~event ~~and~~of itcontract ~~is possible that it will increase~~termination. ~~Because~~The derivative ~~our~~contracts ~~hedging~~may ~~arrangements~~be ~~are~~terminated ~~based~~by ona ~~benchmark~~non-defaulting ~~prices,~~party ~~they do not protect us from adverse changes~~ in the ~~differential~~event ~~between~~of ~~the~~default ~~benchmark~~by ~~price~~one ~~and~~of the ~~Southern~~parties ~~California indexes applicable~~ to ~~our~~the ~~production~~agreement. ~~The difficulty involved in predicting that differential makes it difficult for us to effectively hedge our production.~~

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(UNAUDITED)

3. HEDGING AND DERIVATIVE FINANCIAL INSTRUMENTS (Continued)

The components of commodity derivative losses (gains) in the condensed consolidated statements of operations are as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2013			2014			2013			2014
	2014			2015
Realized commodity derivative losses (gains)	$	43,~~261~~525		$	1(14,~~355~~865	)	$	~~24,010~~		$	~~9,410~~
Amortization of commodity derivative premiums		1,017			1,204			2,984			3,612
Unrealized commodity derivative losses (gains) for changes in fair value		(5,620	)		1,960
Unrealized commodity derivative losses (gains) for changes in fair value		8,893			(32,895	)		(29,431	)		(26,543	)


Commodity derivative losses (gains), net	$	(2,095	)	$	(12,905	)
Commodity derivative losses (gains), net	$	14,171		$	(30,336	)	$	(2,437	)	$	(13,521	)

InAs ~~January~~of ~~2013~~March 31, in2015, ~~connection with~~ the ~~sale of the~~ Company's ~~Sacramento~~had ~~Basin~~entered ~~natural~~into ~~gas~~certain ~~properties~~swap, ~~the~~collar ~~Company~~and ~~unwound~~put ~~all~~agreements ofrelated to its ~~then~~oil ~~outstanding~~production. ~~natural~~The ~~gas~~aggregate ~~derivative~~economic ~~contracts, as~~effects ~~well~~of asthose ~~all~~agreements ~~natural~~are summarized ~~gas~~below. ~~basis~~Location ~~swaps,~~ and ~~incurred~~quality adifferentials ~~realized~~attributable ~~loss~~to ~~of $3.8 million. In February 2013,~~ the Company's ~~unwound~~properties ~~25%,~~are ornot ~~975~~included ~~barrels~~in ~~per~~the ~~day,~~following ofprices. ~~oil~~The ~~basis~~agreements ~~swaps,~~provide ~~incurring~~for amonthly ~~realized loss~~settlement ofbased ~~$2.1 million.~~on ~~The~~the differential ~~total~~between ~~amount~~the ~~paid~~agreement toprice ~~settle~~and ~~derivative~~the ~~contracts~~price inper the ~~first~~applicable ~~quarter~~index, ofInter-Continental ~~2013~~Exchange ~~was~~Brent $5("Brent").~~9 million.~~

The Company has paid premiums related to certain of its outstanding derivative contracts. These premiums are amortized into commodity derivative (gains) losses over the period for which the contracts are effective. At September 30, 2014, the balance of unamortized net derivative premiums paid was $4.9 million, of which $1.2 million and $3.7 million will be amortized in the remainder of 2014 and 2015, respectively.

	Oil (Brent)

	Barrels/day		Weighted Avg. Prices per Bbl
January 1 - December 31, 2015:
Swaps		460	$	100.40
Collars		4,135	$	90.00/$100.00
January 1 - December 31, 2016:
Swap		1,715	$	96.00
Collars		1,715	$	90.00/$101.75

Fair Value of Derivative Instruments. The ~~aggregate~~ ~~economic~~estimated ~~effects~~fair values of derivatives included in the ~~Company's~~condensed ~~derivative~~consolidated ~~contracts~~balance assheets ofat March 31, ~~September~~2015 and December 3031, 2014 are summarized below. ~~Location~~The ~~and~~net ~~quality~~fair ~~differentials~~value ~~attributable~~of to the Company's ~~properties~~derivatives ~~are~~decreased ~~not~~by ~~included~~$2.0 million from a net asset of $78.1 million at December 31, 2014 to a net asset of $76.1 million at March 31, 2015, primarily due to (i) changes in the ~~following~~futures prices. ~~The~~for ~~agreements~~oil, ~~provide~~which ~~for~~are ~~monthly~~used in the calculation of the fair value of commodity derivatives, (ii) settlement ~~based~~of oncommodity derivative positions during the ~~differential~~current ~~between~~period and (iii) changes to the ~~agreement~~Company's ~~price~~commodity derivative portfolio in 2015. The Company does not offset asset and liability positions with the ~~price~~same ~~per~~counterparties within the ~~applicable~~financial statements; rather, all contracts are presented at their gross estimated fair value. ~~index~~As of the dates indicated, ~~Brent~~the ~~(oil)~~Company's orderivative ~~Henry~~assets ~~Hub~~and liabilities are presented below (~~natural~~in ~~gas~~thousands). These balances represent the estimated fair value of the contracts. The Company has not designated any of its derivative contracts as

	Oil (Brent)				Natural Gas (Henry Hub)
	Barrels/day		Weighted Avg. Prices per Bbl		MMBtu/day		Weighted Avg. Prices per MMBtu
July 1 - December 31, 2014:
Swaps		1,500	$	107.00
Collars		4,100	$	90.00/$98.59		2,000	$	4.35/$5.01
Puts		575	$	90.00
January 1 - December 31, 2015:
Swaps		460	$	100.40
Collars		4,135	$	90.00/$100.00
Puts				—
January 1 - December 31, 2016:
Swap		1,715	$	96.00
Collars		1,715	$	90.00/$101.75

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

3. HEDGING AND DERIVATIVE FINANCIAL INSTRUMENTS (Continued)

Fair Value of Derivative Instruments. The estimated fair values of derivatives included in the condensed consolidated balance sheets at September 30, 2014 and December 31, 2013 are summarized below. The net fair value of the Company's derivatives changed by $22.7 million from a net liability of $23.7 million at December 31, 2013 to a net liability of $1.0 million at September 30, 2014, primarily due to (i) changes in the futures prices for oil, which are used in the calculation of the fair value of commodity derivatives, (ii) settlement of commodity derivative positions during the current period and (iii) changes to the Company's commodity derivative portfolio in 2014. The Company does not offset asset and liability positions with the same counterparties within the financial statements; rather, all contracts are presented at their gross estimated fair value. As of the dates indicated, the Company's derivative assets and liabilities are presented below (in thousands). These balances represent the estimated fair value of the contracts. The Company has not designated any of its derivative contracts as cash-flow hedging instruments for accounting purposes. The main headings represent the balance sheet captions for the contracts presented (in thousands):.

	December 31, 2013			September 30, 2014
	December 31, 2014			March 31, 2015
Current Assets—Commodity derivatives:
Oil derivative contracts	$	~~340~~48,298		$	249,~~113~~484
Gas derivative contracts		—			51

		340			2,164

Noncurrent Assets—Commodity derivatives:
Oil derivative contracts		—29,793			~~171~~26,647

Current Liabilities—Commodity derivatives:
Net derivative asset (liability)		78,091		$	76,131
Oil derivative contracts		(13,464	)		(2,161	)

Noncurrent Liabilities—Commodity derivatives:
Oil derivative contracts		(10,601	)		(968	)

Net derivative asset (liability)	$	(23,725	)	$	(794	)

17 4. ASSET RETIREMENT OBLIGATIONS

The following table summarizes the activities for the Company's asset retirement obligations for the three months ended March 31, 2014 and 2015 (in thousands):

	Three Months Ended March 31,

	2014			2015
Asset retirement obligations at beginning of period	$	38,182		$	30,851
Revisions of estimated liabilities		(594	)		—
Liabilities incurred or acquired		72			—
Accretion expense		667			497

Asset retirement obligations at end of period		38,327			31,348
Less: current asset retirement obligations (classified with accounts payable and accrued liabilities)		(700	)		(500	)

Long-term asset retirement obligations	$	37,627		$	30,848

Discount rates used to calculate the present value vary depending on the estimated timing of the obligation, but typically range between 4% and 9%. During the fourth quarter of 2014, the liabilities settled or disposed of $9.4 million for 2014 primarily relate to the Montalvo asset sale.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

4. ASSET RETIREMENT OBLIGATIONS

The following table summarizes the activities for the Company's asset retirement obligations for the nine months ended September 30, 2013 and 2014 (in thousands):

	Nine Months Ended September 30,
	2013			2014
Asset retirement obligations at beginning of period	$	43,319		$	38,182
Revisions of estimated liabilities		(360	)		(594	)
Liabilities incurred or acquired		233			221
Liabilities settled or disposed		(7,551	)		(599	)
Accretion expense		1,866			1,852

Asset retirement obligations at end of period		37,507			39,062
Less: current asset retirement obligations (classified with accounts payable and accrued liabilities)		(2,200	)		(500	)

Long-term asset retirement obligations	$	35,307		$	38,562

Discount rates used to calculate the present value vary depending on the estimated timing of the obligation, but typically range between 4% and 9%.

5. SHARE-BASED PAYMENTS

The Company has granted cash settlement or liability awards to officers, directors and certain employees of the Company including rights-to-receive awards (RTR), restricted share unit awards (RSUs), share appreciation rights (SARs) and ESOP restricted share units. The Company measures its liability awards based on the award's fair value remeasured at each reporting date until the date of settlement. Compensation cost for each period until settlement is based on the change (or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date). Changes in the fair value of a liability that occur after the end of the requisite service period are compensation cost of the period in which the changes occur. Any difference between the amount for which a liability award is settled and its fair value at the settlement date is an adjustment of compensation cost in the period of settlement.

6. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. The FASB has established a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy are as follows:

Level 1—Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2—Pricing inputs are other than quoted prices in active markets included in level 1, but are either directly or indirectly observable as of the reported date and for substantially the full term of the instrument. Inputs may include quoted prices for similar assets and liabilities. Level 2 includes those financial instruments that are valued using models or other valuation methodologies.

Level 3—Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management's best estimate of fair value.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

6. FAIR VALUE MEASUREMENTS (Continued)

table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of March 31, 2015 (in thousands).



Assets (Liabilities):
Commodity derivative contracts	—	76,131	—		76,131
Share-based compensation	—	—	(1,209	)	(1,209	)

Derivative instruments. The Company's commodity derivative instruments consist primarily of swaps and collars for oil and natural gas. The Company values the derivative contracts using industry standard models, based on an income approach, which considers various assumptions including quoted forward prices and contractual prices for the underlying commodities, time value and volatility factors, as well as other relevant economic measures. Substantially all of the assumptions can be observed throughout the full term of the contracts, can be derived from observable data or are supportable by observable levels at which transactions are executed in the marketplace and are therefore designated as level 2 within the fair value hierarchy. The discount rates used in the assumptions include a component of non-performance risk. The Company utilizes the relevant counterparty valuations to assess the reasonableness of the calculated fair values.

Share-based compensation. The Company's current share-based compensation liability includes a liability for restricted share unit awards (RSUs), share appreciation rights (SARs) and employee stock ownership plan unit awards (ESOP). The fair value of DPC common stock is a significant input for determining the share-based compensation amounts and the liability amounts for these cash settled awards. DPC is a privately held entity for which there is no available market price or principal market for DPC common shares. Inputs for determining the fair market value of this instrument are unobservable and are therefore classified as Level 3 inputs. The Company utilizes various valuation methods for determining the fair market value of this instrument including a net asset value approach, a comparable company approach, a discounted cash flow approach and a transaction approach. The Company's estimate of the value of DPC shares is highly dependent on commodity prices, cost assumptions, discount rates, oil and natural gas proved reserves, overall market conditions and the identification of companies and transactions that are comparable to the Company's operations and reserve characteristics. While some inputs to the Company's calculation of fair value of DPC shares are from published sources, others, such as reserve values, the discount rate and expected future cash flows, are derived from the Company's own calculations and estimates. Significant changes in the unobservable inputs, summarized above, could result in a significantly different fair value estimate.

The grant date fair value of each SAR is estimated using the Black-Scholes valuation model. The fair market value of DPC common shares is a significant input into the Black-Scholes valuation model. Valuation models require the input of highly subjective assumptions, including the expected volatility of the price of the underlying stock. DPC shares have characteristics significantly different from those of traded shares, and because changes in the subjective input assumptions can materially affect the fair value estimate, it is management's opinion that the valuations afforded by existing models are different from the value that the shares would realize if traded in the market.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

5 6. ~~SHARE-BASED~~FAIR ~~PAYMENTS~~VALUE MEASUREMENTS (Continued)

The following table summarizes the ~~Company's~~changes in fair value of financial assets (liabilities), which represent primarily share-based compensation ~~liability~~liabilities, atdesignated as Level 3 in the valuation hierarchy (in thousands):

	September 30, 2014
	Three Months Ended March 31,
Share-based compensation liability at beginning of period	$	37,444
	2014			2015
Total share-based compensation costs		(3,729	)
Fair value liability, beginning of period	$	(20,928	)	$	(1,038	)
Payouts		(19,017	)
Transfers into Level 3(1)		(2,249	)		(181	)
Excess of share-based compensation expense recognized over payments made		(1,602	)
Transfers out of Level 3(2)		242			10

Change in fair value of Level 3		(5	)		—
Share-based compensation liability at end of period		13,096

Less: current share-based compensation liability		(3,048	)
Fair value liability, end of period	$	(22,940	)	$	(1,209	)

Long-term share-based compensation liability	$	10,048

(1): The transfers into Level 3 liability during the first quarter of 2015 and 2014 relate to RSU, SAR and ESOP grants made by the Company to officers, directors and certain employees, and requisite service period expense.
(2): The transfers out of Level 3 liability during the first quarter of 2015 and 2014 relate to cash settlements of RSU grants, and forfeitures of RSU, SAR and ESOP grants as a result of employee terminations.

Fair Value of Financial Instruments. The Company's financial instruments consist primarily of cash and cash equivalents, accounts ~~following~~receivable ~~summarizes~~and payable, derivatives (discussed above) and long-term debt. The carrying values of cash equivalents and accounts receivable and payable are representative of their fair values due to their short-term maturities. The carrying amount of Venoco's revolving credit facility approximated fair value because the ~~composition~~interest rate of the ~~share-based~~facility ~~compensation~~was ~~liability~~variable. atThe fair value of the Venoco senior notes listed in the table below was derived from available market data (Level 1). We used available market data and valuation techniques (Level 2) to estimate the fair value of the DPC PIK toggle notes. This disclosure does not impact our financial position, results of operations or cash flows (in thousands):.

	December 31, 2013						September 30, 2014
	December 31, 2014				March 31, 2015
	Current Liability		Long Term Liability		Total Liability		Current Liability		Long Term Liability		Total Liability
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Rights to receive	$	16,516	$	—	$	16,516	$	1,538	$	—	$	1,538
Venoco:
Restricted share units		3,067		1,953		5,020		1,510		757		2,267
Revolving credit agreement	$	65,000	$	65,000	$	71,400	$	71,400
Share appreciation rights		1,140		14,144		15,284		—		8,583		8,583
8.875% senior notes		500,000		262,000		500,000		255,000
ESOP		—		624		624		—		708		708
Denver Parent Corporation:

12.25% / 13.00% senior PIK toggle notes		275,065		120,369		284,336		43,717
Total share-based compensation liability	$	20,723	$	16,721	$	37,444	$	3,048	$	10,048	$	13,096

Assets and Liabilities Measured on a Non-recurring Basis. The Company ~~recognized~~uses ~~total~~fair ~~share-~~value to determine the value of its asset retirement obligations ("ARO"). The inputs used to determine such fair value under the expected present value technique are primarily based ~~compensation~~upon internal estimates prepared by reservoir engineers for costs asof ~~follows~~dismantlement, removal, ~~(in~~site ~~thousands):~~reclamation and similar activities associated with the Company's oil and gas properties and would be classified Level 3 inputs.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2014			2013			2014
General and administrative expense	$	(2,890	)	$	(6,173	)	$	5,850		$	(3,055	)
Oil and natural gas production expense		(321	)		(1,263	)		670			(674	)

Total share-based compensation costs		(3,211	)		(7,436	)		6,520			(3,729	)
Less: share-based compensation costs capitalized		708			2,551			(2,275	)		1,516

Share-based compensation expense, net	$	(2,503	)	$	(4,885	)	$	4,245		$	(2,213	)

As of September 30, 2014, there were $10.2 million of total unrecognized compensation cost, which is expected to be recognized over a period of 3.25 years.

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

5 7. ~~SHARE-BASED PAYMENTS (Continued)~~ CONTINGENCIES

~~The~~ ~~following~~ In ~~summarizes~~ the ~~Company's~~ordinary ~~cash~~course ~~settlement~~of ~~awards~~our ~~granted~~business ~~during~~we are named from time to time as a defendant in various legal proceedings. We maintain liability insurance and believe that our coverage is reasonable in view of the ~~nine~~legal ~~months~~risks ~~ended~~to ~~September 30,~~which ~~2014:~~our business is subject.

						Restricted Share Units					Share Appreciation Rights					Employee Stock Ownership Plan
	Rights to Receive
									Weighted Average Grant-Date Fair Value					Weighted Average Grant-Date Fair Value					Weighted Average Grant-Date Fair Value
	Units			Cash Value		Units					Units					Units
Outstanding, start of period		1,241,264		$	12.50		778,065		$	8.33		4,345,594		$	3.52		196,679		$	8.33
Granted		—		$	—		147,802		$	12.24		1,411,772		$	7.42		146,525		$	12.24
Vested or exercised		(1,084,926	)	$	12.50		(241,522	)	$	8.33		(114,835	)	$	8.33		—		$	—
Cancelled and other		(15,583	)	$	12.50		(101,930	)	$	8.33		(924,107	)	$	5.62		(48,862	)	$	8.33

Outstanding, end of period		140,755					582,415					4,718,424					294,342


Exercisable, end of period												3,196,609

Delaware Litigation—In August 2011 Timothy Marquez, the then-Chairman and CEO of Venoco, submitted a nonbinding proposal to the board of directors of Venoco to acquire all of the shares of Venoco he did not beneficially own for $12.50 per share in cash (the "Marquez Proposal"). As a result of that proposal, five lawsuits were filed in the Delaware Court of Chancery in 2011 against Venoco and each of its directors by shareholders alleging that Venoco and its directors had breached their fiduciary duties to the shareholders in connection with the Marquez Proposal. On January 16, 2012, Venoco entered into a Merger Agreement with Mr. Marquez and certain of his affiliates pursuant to which Venoco, Mr. Marquez and his affiliates would effect the going private transaction. Following announcement of the Merger Agreement, five additional suits were filed in Delaware and three suits were filed in federal court in Colorado naming as defendants Venoco and each of its directors. In March 2013 the plaintiffs in Delaware filed a consolidated amended class action complaint in which they requested that the court determine among other things that (i) the merger consideration is inadequate and the Merger Agreement was entered into in breach of the fiduciary duties of the defendants and is therefore unlawful and unenforceable and (ii) the merger should be rescinded or in the alternative, the class should be awarded damages to compensate them for the loss as a result of the breach of fiduciary duties by the defendants. The Colorado actions have been administratively closed pending resolution of the Delaware case. Venoco has reviewed the allegations contained in the amended complaint and believes they are without merit. Trial is expected to occur in 2015.

~~Additional~~ Denbury Arbitration—In January 2013 Venoco and its wholly owned subsidiary, TexCal Energy South Texas, L.P. ("TexCal"), notified Denbury ~~information~~Resources, Inc. ~~related~~through its subsidiary Denbury Onshore, LLC ("Denbury") that it was invoking the arbitration provisions contained in contracts between TexCal and Denbury pursuant to which ~~SARs~~TexCal ~~outstanding~~conveyed its interest in the Hastings Complex to Denbury and retained a reversionary interest. Denbury is obligated to convey the reversionary interest to TexCal at ~~September 30~~"payout" as defined in the contracts. The dispute involves the calculation of the cost of CO2 delivered to the Hastings Complex which is used in Denbury's enhanced oil recovery operations. The Company believes that Denbury has materially overcharged the payout account for the cost of CO2 and the cost of transporting it to the Hastings Complex. In December 2013, the three judge arbitration panel unanimously agreed with Venoco's position. In January 2014 Denbury isrequested asthat ~~follows:~~the arbitration panel modify its decision in a way that could increase the cost of CO2. In March 2014 the Arbitration Panel modified its original award consistent with the Company's position and awarded the Company approximately $1.8 million in attorneys' fees and costs incurred in the arbitration. In late March 2014 Denbury appealed the arbitration ruling to the District Court for Harris County, Texas asking the court to vacate the arbitration award. On February 11, 2015 the District Court granted Venoco's motion to confirm the arbitration award. On March 12, 2015 Denbury filed a motion for a new trial with the District Court.

	SARs Outstanding						SARs Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life		Weighted- Average Exercise Prices		Number Exercisable		Weighted Average Remaining Contractual Life		Weighted Average Exercise Prices
$8.33		371,789		6.0	$	8.33		96,310		6.0	$	8.33
$12.24		1,039,493		7.0	$	12.24		177,144		7.0	$	12.24
$12.50		2,358,393		4.1	$	12.50		2,338,491		4.1	$	12.50
$12.51 - $20.00		948,749		4.5	$	19.14		584,664		3.5	$	18.59

		4,718,424		5.0	$	13.45		3,196,609		4.1	$	13.47

Other—In addition, Venoco is a party from time to time to other claims and legal actions that arise in the ordinary course of business. Venoco believes that the ultimate impact, if any, of these other

The grant date fair value of each SAR is estimated using the Black-Scholes valuation model. Valuation models require the input of highly subjective assumptions, including the expected volatility of the price of the underlying stock. The Company's units have characteristics significantly different from those of traded units, and because changes in the subjective input assumptions can materially affect the fair value estimate, it is management's opinion that the valuations afforded by existing models are different from the value that the units would realize if traded in the market.

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

5 7. ~~SHARE-BASED~~CONTINGENCIES ~~PAYMENTS~~ (Continued)

~~The~~claims ~~following~~and ~~assumptions~~legal ~~were~~actions ~~used~~will tonot ~~compute~~have ~~the~~a ~~grant~~material ~~date~~effect ~~fair~~on ~~value~~its consolidated financial position, results of ~~SARs~~operations ~~outstanding~~or ~~at:~~liquidity.

	December 31, 2013	September 30, 2014
Expected lives	0.5 - 6.0 years	0.5 - 7.0 years
Risk free interest rates	0.10% - 2.10%	0.06% - 2.22%
Estimated volatilities	45% - 60%	45% - 60%
Dividend yield	0.0%	0.0%

8. GUARANTOR FINANCIAL INFORMATION

All 6subsidiaries of Venoco other than Ellwood Pipeline Inc. ~~FAIR~~("Guarantors") ~~VALUE~~have ~~MEASUREMENTS~~ fully and unconditionally guaranteed, on a joint and several basis, Venoco's obligations under its 8.875% senior notes. Ellwood Pipeline, Inc. is not a Guarantor (the "Non-Guarantor Subsidiary"). The condensed consolidating financial information for prior periods has been revised to reflect the guarantor and non-guarantor status of the Company's subsidiaries as of March 31, 2015. All Guarantors are 100% owned by Venoco. Presented below are Venoco's condensed consolidating balance sheets, statements of operations and statements of cash flows as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934. There are currently no guarantors of DPC's 12.25%/13.00% senior PIK toggle notes.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table sets forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as of September 30, 2014 (in thousands).

	Level 1		Level 2			Level 3			Fair Value
Assets (Liabilities):
Commodity derivative contracts	$	—	$	2,335		$	—		$	2,335
Commodity derivative contracts		—		(3,128	)		—			(3,128	)
Share-based compensation		—		—			(11,559	)		(11,559	)

The Company's commodity derivative instruments consist primarily of swaps, collars and option contracts for oil. The Company values the derivative contracts using industry standard models, based on an income approach, which considers various assumptions including quoted forward prices and contractual prices for the underlying commodities, time value and volatility factors, as well as other relevant economic measures. Substantially all of the assumptions can be observed throughout the full term of the contracts, can be derived from observable data or are supportable by observable levels at which transactions are executed in the marketplace and are therefore designated as level 2 within the fair value hierarchy. The discount rates used in the assumptions include a component of non-performance risk. The Company utilizes the relevant counterparty valuations to assess the reasonableness of the calculated fair values.

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

6 8. ~~FAIR~~GUARANTOR ~~VALUE~~FINANCIAL ~~MEASUREMENTS~~INFORMATION (Continued)

~~Share-based~~ ~~compensation. The~~ CONDENSED ~~Company's~~CONSOLIDATING ~~current~~BALANCE ~~share-based~~SHEETS AT ~~compensation~~DECEMBER ~~liability includes a liability for restricted share unit awards (RSUs)~~31, ~~share~~ ~~appreciation~~2014 ~~rights~~ (~~SARs~~Unaudited) ~~and employee stock ownership plan unit awards~~ (ESOP). The fair value of DPC common stock is a significant input for determining the share-based compensation amounts and the liability amounts for these cash settled awards. DPC is a privately held entity for which there is no available market price or principal market for DPC common shares. Inputs for determining the fair market value of this instrument are unobservable and are therefore classified as Level 3 inputs. The Company utilizes various valuation methods for determining the fair market value of this instrument including a net asset value approach, a comparable company approach, a discounted cash flow approach and a transaction approach. The Company's estimate of the value of DPC shares is highly dependent on commodity prices, cost assumptions, discount rates, proved reserves, overall market conditions and the identification of companies and transactions that are comparable to the Company's operations and reserve characteristics. While some inputs to the Company's calculation of fair value of DPC shares are from published sources, others, such as reserve values, the discount rate and expected future cash flows, are derived from the Company's own calculations and estimates. Significant changes in ~~the unobservable inputs, summarized above, could result in a significantly different fair value estimate.~~ thousands)

The following table summarizes the changes in fair value of financial assets (liabilities) designated as Level 3 in the valuation hierarchy (in thousands):

	Venoco, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations			Consolidated

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	15,455		$	—		$	—		$	—		$	15,455
Accounts receivable		14,140			56			716			—			14,912
Inventories		3,370			—			—			—			3,370
Other current assets		4,715			—			—			—			4,715
Commodity derivatives		48,298			—			—			—			48,298

TOTAL CURRENT ASSETS		85,978			56			716			—			86,750

PROPERTY, PLANT & EQUIPMENT, NET		654,549			(184,362	)		18,327			—			488,514
COMMODITY DERIVATIVES		29,793			—			—			—			29,793
INVESTMENTS IN AFFILIATES		563,401			—			—			(563,401	)		—
OTHER		11,138			59			—			—			11,197

TOTAL ASSETS		1,344,859			(184,247	)		19,043			(563,401	)		616,254



LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities		20,535			—			—			—			20,535
Interest payable		17,329			—			—			—			17,329
Commodity derivatives		—			—			—			—			—
Share-based compensation		2,236			—			—			—			2,236

TOTAL CURRENT LIABILITIES:		40,100			—			—			—			40,100

LONG-TERM DEBT		565,000			—			—			—			565,000
COMMODITY DERIVATIVES		—			—			—			—			—
ASSET RETIREMENT OBLIGATIONS		27,906			1,652			793			—			30,351
SHARE-BASED COMPENSATION		648			—			—			—			648
INTERCOMPANY PAYABLES (RECEIVABLES)		735,845			(655,326	)		(80,555	)		36			—

TOTAL LIABILITIES		1,369,499			(653,674	)		(79,762	)		36			636,099

TOTAL STOCKHOLDERS' EQUITY(DEFICIT)		(24,640	)		469,427			98,805			(563,437	)		(19,845	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)	$	1,344,859		$	(184,247	)	$	19,043		$	(563,401	)	$	616,254

	Nine Months Ended September 30,
	2013			2014
Fair value liability, beginning of period	$	(3,091	)	$	(20,928	)
Transfers into Level 3(1)		(10,296	)		(5,507	)
Transfers out of Level 3(2)		3,367			5,555
Change in fair value of Level 3		4,159			9,322

Fair value liability, end of period	$	(5,861	)	$	(11,559	)

Fair Value of Financial Instruments. The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable and payable, derivatives (discussed above) and long-term debt. The carrying values of cash equivalents and accounts receivable and payable are representative of their fair values due to their short-term maturities. The carrying amount of Venoco's revolving credit facility approximated fair value because the interest rate of the facility is variable. The fair value of the senior notes and senior PIK toggle notes listed in the tables below were derived from available market

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

6 8. ~~FAIR~~GUARANTOR ~~VALUE~~FINANCIAL ~~MEASUREMENTS~~INFORMATION (Continued)

~~data.~~ ~~This~~ CONDENSED ~~disclosure~~CONSOLIDATING ~~does~~BALANCE ~~not~~SHEETS AT ~~impact~~MARCH ~~our financial position~~31, ~~results~~2015 ~~of operations or cash flows~~ (Unaudited) (in thousands).

	December 31, 2013						September 30, 2014
	Venoco, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations			Consolidated
	Carrying Value			Estimated Fair Value			Carrying Value			Estimated Fair Value
ASSETS
Venoco:
CURRENT ASSETS:
Revolving credit agreement	$	205,000		$	205,000		$	265,000		$	265,000
Cash and cash equivalents	$	7,921		$	—		$	—		$	—		$	7,921
8.875% senior notes		500,000			490,000			500,000			455,000
Accounts receivable		11,059			51			1,197			—			12,307
Denver Parent Corporation:
Inventories		3,386			—			—			—			3,386
12.25% / 13.00% senior PIK toggle notes		248,501			244,773			266,226			231,617
Prepaid expenses and other current assets		3,333			—			—			—			3,333
Commodity derivatives		49,484			—			—			—			49,484

TOTAL CURRENT ASSETS		75,183			51			1,197			—			76,431

PROPERTY, PLANT & EQUIPMENT, NET		648,194			(184,388	)		18,118			—			481,924
COMMODITY DERIVATIVES		26,647												26,647
INVESTMENTS IN AFFILIATES		563,401			—			—			(563,401	)		—
OTHER		10,985			59			—			—			11,044

TOTAL ASSETS		1,324,410			(184,278	)		19,315			(563,401	)		596,046



LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities		18,073			—			—			—			18,073
Interest payable		5,535			—			—			—			5,535
Commodity derivatives		—			—			—			—			—
Share-based compensation		602			—			—			—			602

TOTAL CURRENT LIABILITIES:		24,210			—			—			—			24,210

LONG-TERM DEBT		571,400			—			—			—			571,400
COMMODITY DERIVATIVES		—			—			—			—			—
ASSET RETIREMENT OBLIGATIONS		28,365			1,685			798			—			30,848
SHARE-BASED COMPENSATION		731			—			—			—			731
INTERCOMPANY PAYABLES (RECEIVABLES)		738,681			(655,458	)		(83,259	)		36			—

TOTAL LIABILITIES		1,363,387			(653,773	)		(82,461	)		36			627,189

TOTAL STOCKHOLDERS' EQUITY		(38,977	)		469,495			101,776			(563,437	)		(31,143	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,324,410		$	(184,278	)	$	19,315		$	(563,401	)	$	596,046

7. CONTINGENCIES

In the ordinary course of our business we are named from time to time as a defendant in various legal proceedings. We maintain liability insurance and believe that our coverage is reasonable in view of the legal risks to which our business is subject.

Beverly Hills Litigation—Between June 2003 and April 2005, six lawsuits were filed against Venoco, certain other energy companies, the City of Beverly Hills (the "City") and the Beverly Hills Unified School District in Los Angeles County Superior Court by persons who attended Beverly Hills High School or who were or are citizens of Beverly Hills/Century City or visitors to that area during the time period running from the 1930s to 2005 (the "Beverly Hills Lawsuits"). Plaintiffs alleged that exposure to substances in the air, soil and water that originated from either oil-field or other operations in the area were the cause of their cancers and other maladies. In July 2012 Venoco entered into a settlement agreement, for an immaterial amount, pursuant to which all pending cases against it were dismissed with prejudice.

The City and its insurance companies have made claims for indemnity against Venoco and others related to costs incurred by the City in defending itself against the Beverly Hills Lawsuits, which Venoco and the other defendants are disputing. Venoco believes that these claims for indemnity are without merit. In July 2014 a Los Angeles County Superior Court Judge granted Venoco's motion for summary judgment dismissing the claims of the City's two insurance companies against Venoco. The two insurance companies have appealed that ruling. Venoco believes that it will prevail in the appeal. In September 2014 Venoco and the City entered into a settlement agreement and the City subsequently dismissed its claim.

Delaware Litigation—In August 2011, Timothy Marquez, the then- Chairman and CEO of Venoco, submitted a nonbinding proposal to the board of directors of Venoco to acquire all of the shares of Venoco he did not beneficially own for $12.50 per share in cash (the "Marquez Proposal"). As a result of that proposal, five lawsuits were filed in the Delaware Court of Chancery in September 2011 against Venoco and each of its directors by shareholders alleging that Venoco and its directors had breached their fiduciary duties to the shareholders in connection with the Marquez Proposal. On January 16, 2012, Venoco entered into a Merger Agreement with Mr. Marquez and certain of his affiliates pursuant to which Venoco, Mr. Marquez and his affiliates would effect the going private transaction. Following

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

7 8. ~~CONTINGENCIES~~GUARANTOR FINANCIAL INFORMATION (Continued)

~~announcement of~~ ~~the Merger Agreement, five additional suits were filed in Delaware and three suits were filed in federal court in Colorado naming as defendants Venoco and each of its directors. In~~ ~~March~~ CONDENSED ~~2013~~CONSOLIDATING ~~the~~STATEMENTS ~~plaintiffs~~OF inOPERATIONS THREE ~~Delaware~~MONTHS ~~filed~~ENDED aMARCH ~~consolidated~~31, ~~amended~~2014 ~~class action complaint in which they requested that the court determine among other things that~~ (iUnaudited) ~~the merger consideration is inadequate and the Merger Agreement was entered into in breach of the fiduciary duties of the defendants and is therefore unlawful and unenforceable and~~ (~~ii) the merger should be rescinded or~~ in the alternative, the class should be awarded damages to compensate them for the loss as a result of the breach of fiduciary duties by the defendants. The Colorado actions have been administratively closed pending resolution of the Delaware case. Venoco has reviewed the allegations contained in the amended complaint and believes they are without merit. Trial for this matter is expected to occur in 2015. thousands)

Denbury Arbitration—In January 2013 Venoco and its wholly owned subsidiary, TexCal Energy South Texas, L.P. ("TexCal"), notified Denbury Resources, Inc. through its subsidiary Denbury Onshore, LLC ("Denbury") that it was invoking the arbitration provisions contained in contracts between TexCal and Denbury pursuant to which TexCal conveyed its interest in the Hastings Complex to Denbury and retained a reversionary interest. Denbury is obligated to convey the reversionary interest to TexCal at "payout," as defined in the contracts. The dispute involves the calculation of the cost of CO2 delivered to the Hastings Complex which is used in Denbury's enhanced oil recovery operations. Venoco believes that Denbury has materially overcharged the payout account for the cost of CO2 and the cost of transporting it to the Hastings Complex. In December 2013 a three judge arbitration panel unanimously agreed with Venoco's position. In January 2014, Denbury requested that the panel modify its decision in a way that could increase the cost of CO2 delivered to the Hastings Complex. In March 2014, the arbitration panel modified its original award consistent with Venoco's position and awarded the Company approximately $1.8 million in attorneys' fees and costs incurred in the arbitration. In late March 2014, Denbury appealed the arbitration ruling to the District Court for Harris County Texas asking the court to vacate the arbitration award. In May 2014 Venoco filed an answer to Denbury's petition and requested that the court confirm the arbitration award. Venoco believes the arbitration results are final and binding and that the court will uphold the award.

	Venoco, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiary			Eliminations			Consolidated

REVENUES:
Oil and natural gas sales	$	62,213		$	325	$	—		$	—		$	62,538
Other		115			—		1,818			(1,474	)		459

Total revenues		62,328			325		1,818			(1,474	)		62,997

EXPENSES:
Lease operating expense		18,780			18		670			—			19,468
Production and property taxes		1,736			—		—			—			1,736
Transportation expense		1,435			3		—			(1,381	)		57
Depletion, depreciation and amortization		10,942			26		208			—			11,176
Accretion of asset retirement obligations		625			31		11			—			667
General and administrative, net of amounts capitalized		8,631			—		124			(93	)		8,662

Total expenses		42,149			78		1,013			(1,474	)		41,766

Income (loss) from operations		20,179			247		805			—			21,231
FINANCING COSTS AND OTHER:
Interest expense, net		14,374			—		(1,434	)		—			12,940
Amortization of deferred loan costs		833			—		—			—			833
Commodity derivative losses (gains), net		(2,095	)		—		—			—			(2,095	)

Total financing costs and other		13,112			—		(1,434	)		—			11,678

Equity in subsidiary income		1,541			—		—			(1,541	)		—

Income (loss) before income taxes		8,608			247		2,239			(1,541	)		9,553
Income tax provision (benefit)		(945	)		94		851			—			—

Net income (loss)	$	9,553		$	153	$	1,388		$	(1,541	)	$	9,553

Other—In addition, the Company is a party from time to time to other claims and legal actions that arise in the ordinary course of business. The Company believes that the ultimate impact, if any, of these other claims and legal actions will not have a material effect on its consolidated financial position, results of operations or liquidity.

8. GUARANTOR FINANCIAL INFORMATION

All subsidiaries of Venoco other than Ellwood Pipeline Inc. ("Guarantors") have fully and unconditionally guaranteed, on a joint and several basis, Venoco's obligations under its 8.875% senior notes (and, until October 2013, under its 11.50% senior notes). Ellwood Pipeline, Inc. is not a Guarantor (the "Non-Guarantor Subsidiary"). All Guarantors are 100% owned by Venoco. Presented below are Venoco's condensed consolidating balance sheets, statements of operations and statements of cash flows as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934. There are currently no guarantors of DPC's 12.25%/13.00% senior PIK toggle notes.

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

8. GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATING ~~BALANCE~~STATEMENTS ~~SHEETS~~OF OPERATIONS ATTHREE ~~DECEMBER~~MONTHS ENDED MARCH 31, ~~2013~~2015 (Unaudited) (in thousands)

	Venoco, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations			Consolidated
ASSETS
REVENUES:
CURRENT ASSETS:
Oil and natural gas sales	$	19,602		$	147		$	—		$	—		$	19,749
Cash and cash equivalents	$	828		$	—		$	—		$	—		$	828
Other		121			—			2,498			(1,950	)		669
Accounts receivable		22,593			113			1,031			—			23,737
Inventories		5,166			—			—			—			5,166
Other current assets		4,587			—			—			—			4,587
Commodity derivatives		340			—			—			—			340

TOTAL CURRENT ASSETS		33,514			113			1,031			—			34,658
Total revenues		19,723			147			2,498			(1,950	)		20,418

PROPERTY, PLANT & EQUIPMENT, NET		827,796			(184,250	)		19,083			—			662,629
EXPENSES:
INVESTMENTS IN AFFILIATES		558,630			—			—			(558,630	)		—
Lease operating expense		14,077			11			844			—			14,932
OTHER		17,509			60			—			—			17,569
Production and property taxes		2,132			—			—			—			2,132
Transportation expense		1,894			8			—			(1,855	)		47
Depletion, depreciation and amortization		8,586			26			209			—			8,821
Accretion of asset retirement obligations		459			33			5			—			497
General and administrative, net of amounts capitalized		6,667			—			98			(95	)		6,670

TOTAL ASSETS	$	1,437,449		$	(184,077	)	$	20,114		$	(558,630	)	$	714,856
Total expenses		33,815			78			1,156			(1,950	)		33,099

Income (loss) from operations		(14,092	)		69			1,342			—			(12,681	)
FINANCING COSTS AND OTHER:
Interest expense, net		13,040			—			(1,629	)		—			11,411
Amortization of deferred loan costs		607			—			—			—			607
Commodity derivative losses (gains), net		(12,905	)		—			—			—			(12,905	)

LIABILITIES AND STOCKHOLDERS' EQUITY
Total financing costs and other		742			—			(1,629	)		—			(887	)
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	32,966		$	—		$	—		$	—		$	32,966
Interest payable		17,408			—			—			—			17,408
Commodity and interest derivatives		13,464			—			—			—			13,464
Share-based compensation		20,723			—			—			—			20,723

TOTAL CURRENT LIABILITIES:		84,561			—			—			—			84,561
Equity in subsidiary income		1,884			—			—			(1,884	)		—

LONG-TERM DEBT		705,000			—			—			—			705,000
Income (loss) before income taxes		(12,950	)		69			2,971			(1,884	)		(11,794	)
COMMODITY AND INTEREST DERIVATIVES		10,601			—			—			—			10,601
Income tax provision (benefit)		(1,155	)		26			1,129			—			—
ASSET RETIREMENT OBLIGATIONS		33,707			1,525			750			—			35,982
SHARE-BASED COMPENSATION		16,721			—			—			—			16,721
INTERCOMPANY PAYABLES (RECEIVABLES)		724,832			(654,209	)		(70,659	)		36			—

TOTAL LIABILITIES		1,575,422			(652,684	)		(69,909	)		36			852,865
Net income (loss)	$	(11,795	)	$	43		$	1,842		$	(1,884	)	$	(11,794	)

TOTAL STOCKHOLDERS' EQUITY		(137,973	)		468,607			90,023			(558,666	)		(138,009	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,437,449		$	(184,077	)	$	20,114		$	(558,630	)	$	714,856

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

8. GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATING ~~BALANCE~~STATEMENT ~~SHEETS~~OF CASH FLOWS ATFOR ~~SEPTEMBER~~THE 30THREE MONTHS ENDED MARCH 31, 2014 (Unaudited) (in thousands)

	Venoco, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations			Consolidated
ASSETS
CASH FLOWS FROM OPERATING ACTIVITIES:
CURRENT ASSETS:
Net cash provided by (used in) operating activities	$	1,628		$	331		$	2,328		$	—		$	4,287
Cash and cash equivalents	$	14,786		$	—		$	—		$	—		$	14,786
CASH FLOWS FROM INVESTING ACTIVITIES:
Accounts receivable		18,085			89			694			—			18,868
Expenditures for oil and natural gas properties		(26,024	)		2			(160	)		—			(26,182	)
Inventories		3,849			—			—			—			3,849
Acquisitions of oil and natural gas properties		(16	)		—			—			—			(16	)
Prepaid expenses and other current assets		4,376			—			—			—			4,376
Expenditures for property and equipment and other		(177	)		—			—			—			(177	)
Commodity derivatives		2,164			—			—			—			2,164

TOTAL CURRENT ASSETS		43,260			89			694			—			44,043
Net cash provided by (used in) investing activities		(26,217	)		2			(160	)		—			(26,375	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (repayments of) intercompany borrowings		2,501			(333	)		(2,168	)		—			—
Proceeds from long-term debt		97,000			—			—			—			97,000
Principal payments on long-term debt		(55,000	)		—			—			—			(55,000	)
Payments for deferred loan costs		(13	)		—			—			—			(13	)
Dividend paid to Denver Parent Corporation		(3,905	)		—			—			—			(3,905	)

PROPERTY, PLANT & EQUIPMENT, NET		864,480			(184,336	)		18,530			—			698,674
Net cash provided by (used in) financing activities		40,583			(333	)		(2,168	)		—			38,082
COMMODITY DERIVATIVES		171			—			—			—			171
INVESTMENTS IN AFFILIATES		563,401			—			—			(563,401	)		—
OTHER		13,582			59			—			—			13,641

TOTAL ASSETS	$	1,484,894		$	(184,188	)	$	19,224		$	(563,401	)	$	756,529
Net increase (decrease) in cash and cash equivalents		15,994			—			—			—			15,994
Cash and cash equivalents, beginning of period		828			—			—			—			828

Cash and cash equivalents, end of period	$	16,822		$	—		$	—		$	—		$	16,822

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	765,000		$	—		$	—		$	—		$	765,000
Accounts payable and accrued liabilities		30,561			—			—			—			30,561
Interest payable		6,162			—			—			—			6,162
Commodity and interest derivatives		2,161			—			—			—			2,161
Share-based compensation		3,048			—			—			—			3,048

TOTAL CURRENT LIABILITIES:		806,932			—			—			—			806,932

LONG-TERM DEBT		—			—			—			—			—
COMMODITY AND INTEREST DERIVATIVES		968			—			—			—			968
ASSET RETIREMENT OBLIGATIONS		36,161			1,619			782			—			38,562
SHARE-BASED COMPENSATION		10,048			—			—			—			10,048
INTERCOMPANY PAYABLES (RECEIVABLES)		733,218			(655,103	)		(78,151	)		36			—

TOTAL LIABILITIES		1,587,327			(653,484	)		(77,369	)		36			856,510

TOTAL STOCKHOLDERS' EQUITY		(102,433	)		469,296			96,593			(563,437	)		(99,981	)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,484,894		$	(184,188	)	$	19,224		$	(563,401	)	$	756,529

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

8. GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATING ~~STATEMENTS~~STATEMENT OF ~~OPERATIONS~~CASH FLOWS FOR THE THREE MONTHS ENDED ~~September 30~~MARCH 31, ~~2013~~2015 (Unaudited) (in thousands)

	Venoco, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations			Consolidated
REVENUES:
CASH FLOWS FROM OPERATING ACTIVITIES:
Oil and natural gas sales	$	79,388		$	308		$	—		$	—		$	79,696
Net cash provided by (used in) operating activities	$	(13,498	)	$	132		$	2,704		$	—		$	(10,662	)
Other		117			—			6,320			(5,188	)		1,249
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for oil and natural gas properties		(4,596	)		—			—			—			(4,596	)
Acquisitions of oil and natural gas properties		(10	)		—			—			—			(10	)
Expenditures for property and equipment and other		(43	)		—			—			—			(43	)
Proceeds provided by sale of oil and gas properties		1,786			—			—			—			1,786

Total revenues		79,505			308			6,320			(5,188	)		80,945
Net cash provided by (used in) investing activities		(2,863	)		—			—			—			(2,863	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (repayments of) intercompany borrowings		2,836			(132	)		(2,704	)		—			—
Proceeds from long-term debt		15,000			—			—			—			15,000
Principal payments on long-term debt		(8,600	)		—			—			—			(8,600	)
Payments for deferred loan costs		(409	)		—			—			—			(409	)
Dividend paid to Denver Parent Corporation		—			—			—			—			—

EXPENSES:
Net cash provided by (used in) financing activities		8,827			(132	)		(2,704	)		—			5,991
Lease operating expense		17,477			19			778			—			18,274
Property and production taxes		(626	)		1			153			—			(472	)
Transportation expense		5,142			3			—			(5,095	)		50
Depletion, depreciation and amortization		12,355			26			170			—			12,551
Accretion of asset retirement obligations		556			29			10			—			595
General and administrative, net of amounts capitalized		5,326			—			125			(93	)		5,358

Total expenses		40,230			78			1,236			(5,188	)		36,356
Net increase (decrease) in cash and cash equivalents		(7,534	)		—			—			—			(7,534	)
Cash and cash equivalents, beginning of period		15,455			—			—			—			15,455

Income from operations		39,275			230			5,084			—			44,589
Cash and cash equivalents, end of period	$	7,921		$	—		$	—		$	—		$	7,921

FINANCING COSTS AND OTHER:
Interest expense, net		16,869			—			(1,195	)		—			15,674
Amortization of deferred loan costs		868			—			—			—			868
Loss on extinguishment of debt		16,787												16,787
Commodity derivative losses (gains), net		14,171			—			—			—			14,171

Total financing costs and other		48,695			—			(1,195	)		—			47,500

Equity in subsidiary income		4,036			—			—			(4,036	)		—

Income (loss) before income taxes		(5,384	)		230			6,279			(4,036	)		(2,911	)
Income tax provision (benefit)		(2,473	)		87			2,386			—			—

Net income (loss)	$	(2,911	)	$	143		$	3,893		$	(4,036	)	$	(2,911	)

9. SUBSEQUENT EVENTS

On April 2, 2015, Venoco entered into agreements relating to three new debt instruments: (i) first lien senior secured notes with an aggregate principal amount of $175 million (the "first lien secured notes"), (ii) second lien senior secured notes with an aggregate principal amount of $150 million (the

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

8 9. ~~GUARANTOR~~SUBSEQUENT ~~FINANCIAL~~EVENTS ~~INFORMATION~~ (Continued)

"second ~~CONDENSED~~lien ~~CONSOLIDATING~~secured ~~STATEMENTS~~notes") OFand ~~OPERATIONS THREE~~(iii) a ~~MONTHS~~$75 million ~~ENDED~~cash ~~SEPTEMBER~~collateralized ~~30,~~senior ~~2014~~secured credit facility (~~Unaudited~~the "term loan facility") (. Approximately $72 million of proceeds from the issuance of the first lien secured notes and the term loan facility were used to repay all amounts outstanding under Venoco's revolving credit facility, which was then terminated. The second lien secured notes were issued in ~~thousands)~~ exchange for $194 million aggregate principal amount of and accrued interest on Venoco's outstanding 8.875% senior notes due 2019.

	Venoco, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiary			Eliminations			Consolidated
REVENUES:
Oil and natural gas sales	$	56,953		$	289	$	—		$	—		$	57,242
Other		119			—		2,058			(1,568	)		609

Total revenues		57,072			289		2,058			(1,568	)		57,851

EXPENSES:
Lease operating expense		17,430			10		785			—			18,225
Production and property taxes		1,961			2		161			—			2,124
Transportation expense		1,520			4		—			(1,473	)		51
Depletion, depreciation and amortization		11,524			27		208			—			11,759
Impairment of oil and gas properties		—			—		—			—			—
Accretion of asset retirement obligations		586			32		11			—			629
General and administrative, net of amounts capitalized		1,294			—		153			(95	)		1,352

Total expenses		34,315			75		1,318			(1,568	)		34,140

Income (loss) from operations		22,757			214		740			—			23,711
FINANCING COSTS AND OTHER:
Interest expense, net		15,168			—		(1,533	)		—			13,635
Amortization of deferred loan costs		887			—		—			—			887
Commodity derivative losses (gains), net		(30,336	)		—		—			—			(30,336	)

Total financing costs and other		(14,281	)		—		(1,533	)		—			(15,814	)

Equity in subsidiary income		1,543			—		—			(1,543	)		—

Income (loss) before income taxes		38,581			214		2,273			(1,543	)		39,525
Income tax provision (benefit)		(944	)		82		863			(1	)		—

Net income (loss)	$	39,525		$	132	$	1,410		$	(1,542	)	$	39,525

First lien secured notes. The first lien secured notes bear interest at 12% per annum and mature in February 2019. The indenture governing the first lien secured notes includes covenants customary for instruments of this type, including restrictions on Venoco's ability to incur additional indebtedness, create liens on its properties, pay dividends and make investments, in each case subject to exceptions. The covenants regarding the incurrence of additional indebtedness contain exceptions for, among other things, (i) up to $25 million of additional secured or unsecured indebtedness that may be issued or incurred in connection with certain projects approved by the holders of the notes, (ii) up to $50 million of additional second lien secured notes that may be issued in exchange for Venoco's outstanding 8.875% senior notes due 2019 and (iii) up to $150 million of additional third lien or unsecured indebtedness that may be issued or incurred in exchange for the Venoco's outstanding 8.875% senior notes or to fund acquisitions. The indenture also includes restrictions on capital expenditures and an operational covenant pursuant to which Venoco is generally required to maintain a specified level of production for each quarterly period until maturity. Other covenants are generally similar to those contained in the indenture governing the existing 8.875% senior notes. Venoco's obligations under the first lien secured notes are guaranteed by all of its subsidiaries other than Ellwood Pipeline, Inc. and secured by a first priority lien on substantially all of the assets of Venoco and the guarantors other than the cash collateral under the term loan facility. Venoco may redeem the first lien secured notes at a redemption price of 109% of the principal amount beginning on January 1, 2016 and declining to 100% by January 1, 2019.

Second lien secured notes. The second lien secured notes bear interest at 8.875% if paid in cash or 12% if paid in kind. Interest may be paid in cash or in kind, at Venoco's option, for semiannual interest periods commencing within 24 months following issuance, but may become payable entirely in cash earlier upon the occurrence of certain events. The second lien secured notes mature in February 2019. The indenture governing the second lien secured notes includes covenants, and exceptions thereto, substantially similar to those set forth in the indenture governing the first lien secured notes. Venoco's obligations under the notes are guaranteed by Venoco's subsidiaries that guarantee the first lien secured notes and are secured by a second priority lien on the same assets securing its obligations under the first lien secured notes. Venoco may redeem the second lien secured notes on the same terms as the existing 8.875% senior notes. The first lien secured notes were issued under an Indenture dated as of April 2, 2015 among Venoco, the guarantors and U.S. Bank National Association, as trustee and collateral agent.

Term loan facility. The term loan facility, which was fully drawn at closing, matures in October 2015. Amounts borrowed under the facility will bear interest at 4.0% per annum for the first thirty days and at 12% thereafter. Venoco may repay or refinance the term facility at any time. The facility contains representations, warranties and covenants typical for instruments of this type. Venoco's

Table of Contents

VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT
CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

8 9. ~~GUARANTOR~~SUBSEQUENT ~~FINANCIAL~~EVENTS ~~INFORMATION~~ (Continued)

obligations under the term loan facility are secured by a first priority lien on cash collateral, which collateral may be released upon the occurrence of certain events, and are guaranteed by Venoco's ~~CONDENSED~~subsidiaries ~~CONSOLIDATING~~that ~~STATEMENTS~~guarantee OFthe ~~OPERATIONS NINE~~first ~~MONTHS~~lien ~~ENDED~~secured ~~SEPTEMBER~~notes 30and second lien secured notes. The term facility was incurred under a term loan and security agreement dated as of April 2, ~~2013~~2015 ~~(Unaudited) (in~~among Venoco, ~~thousands)~~ the guarantors and the lenders party thereto.

	Venoco, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiary			Eliminations			Consolidated
REVENUES:
Oil and natural gas sales	$	246,195		$	909	$	—		$	—		$	247,104
Other		1,141			—		13,088			(10,766	)		3,463

Total revenues		247,336			909		13,088			(10,766	)		250,567

EXPENSES:
Lease operating expense		52,733			46		1,940			—			54,719
Property and production taxes		1,865			16		181			—			2,062
Transportation expense		10,612			9		—			(10,488	)		133
Depletion, depreciation and amortization		35,862			78		589			—			36,529
Accretion of asset retirement obligations		1,749			87		30			—			1,866
General and administrative, net of amounts capitalized		30,590			1		395			(278	)		30,708

Total expenses		133,411			237		3,135			(10,766	)		126,017

Income from operations		113,925			672		9,953			—			124,550

FINANCING COSTS AND OTHER:
Interest expense, net		55,418			—		(3,489	)		—			51,929
Amortization of deferred loan costs		2,887			—		—			—			2,887
Loss on extinguishment of debt		38,084			—		—			—			38,084
Commodity derivative losses (gains), net		(2,437	)		—		—			—			(2,437	)

Total financing costs and other		93,952			—		(3,489	)		—			90,463

Equity in subsidiary income		8,751			—		—			(8,751	)		—

Income (loss) before income taxes		28,724			672		13,442			(8,751	)		34,087
Income tax provision (benefit)		(5,363	)		255		5,108			—			—

Net income (loss)	$	34,087		$	417	$	8,334		$	(8,751	)	$	34,087

Derivatives. In connection with the debt transactions noted above that were entered into on April 2, 2015 Venoco unwound our 2016 derivative contract with ABN AMRO which hedged 1,715 barrels per day of our 2016 oil production, receiving proceeds of $15.6 million. We also novated the remaining derivative contracts to Bank of America Merrill Lynch (BAML).

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

8. GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2014 (Unaudited) (in thousands)

	Venoco, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiary			Eliminations			Consolidated
REVENUES:
Oil and natural gas sales	$	185,413		$	930	$	—		$	—		$	186,343
Other		359			—		5,758			(4,573	)		1,544

Total revenues		185,772			930		5,758			(4,573	)		187,887

EXPENSES:
Lease operating expense		53,450			40		2,388			—			55,878
Production and property taxes		5,928			17		185			—			6,130
Transportation expense		4,437			10		—			(4,290	)		157
Depletion, depreciation and amortization		34,027			79		623			—			34,729
Impairment of oil and gas properties		817			—		—			—			817
Accretion of asset retirement obligations		1,726			94		32			—			1,852
General and administrative, net of amounts capitalized		18,873			1		413			(283	)		19,004

Total expenses		119,258			241		3,641			(4,573	)		118,567

Income (loss) from operations		66,514			689		2,117			—			69,320
FINANCING COSTS AND OTHER:
Interest expense, net		44,378			—		(4,452	)		—			39,926
Amortization of deferred loan costs		2,583			—		—			—			2,583
Commodity derivative losses (gains), net		(13,521	)		—		—			—			(13,521	)

Total financing costs and other		33,440			—		(4,452	)		—			28,988

Equity in subsidiary income		4,501			—		—			(4,501	)		—

Income (loss) before income taxes		37,575			689		6,569			(4,501	)		40,332
Income tax provision (benefit)		(2,757	)		262		2,496			(1	)		—

Net income (loss)	$	40,332		$	427	$	4,073		$	(4,500	)	$	40,332

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

8. GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 (Unaudited) (in thousands)

	Venoco, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	47,531		$	877		$	13,456		$	—	$	61,864
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for oil and natural gas properties		(78,473	)		5			(160	)		—		(78,628	)
Acquisitions of oil and natural gas properties		(45	)		—			—			—		(45	)
Expenditures for property and equipment and other		(2,243	)		—			—			—		(2,243	)
Proceeds from sale of oil and natural gas properties		100,305			—			—			—		100,305

Net cash provided by (used in) investing activities		19,544			5			(160	)		—		19,389
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (repayments of) intercompany borrowings		14,178			(882	)		(13,296	)		—		—
Proceeds from long-term debt		399,900			—			—			—		399,900
Principal payments on long-term debt		(656,379	)		—			—			—		(656,379	)
Premium paid to paydown debt		(19,905	)		—			—			—		(19,905	)
Payments for deferred loan costs		(1,247	)		—			—			—		(1,247	)
Going private share repurchase costs		(9	)		—			—			—		(9	)
Dividend paid to Denver Parent Corporation		(15,800	)		—			—			—		(15,800	)
Denver Parent Corporation capital contribution		158,385			—			—			—		158,385

Net cash provided by (used in) financing activities		(120,877	)		(882	)		(13,296	)		—		(135,055	)

Net increase (decrease) in cash and cash equivalents		(53,802	)		—			—			—		(53,802	)
Cash and cash equivalents, beginning of period		53,818			—			—			—		53,818

Cash and cash equivalents, end of period	$	16		$	—		$	—		$	—	$	16

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VENOCO, INC. AND SUBSIDIARIES AND DENVER PARENT CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

8. GUARANTOR FINANCIAL INFORMATION (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 (Unaudited) (in thousands)

	Venoco, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiary			Eliminations		Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	26,172		$	885		$	7,563		$	—	$	34,620
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for oil and natural gas properties		(75,774	)		9			(71	)		—		(75,836	)
Acquisitions of oil and natural gas properties		(38	)		—			—			—		(38	)
Expenditures for property and equipment and other		(512	)		—			—			—		(512	)

Net cash provided by (used in) investing activities		(76,324	)		9			(71	)		—		(76,386	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (repayments of) intercompany borrowings		8,386			(894	)		(7,492	)		—		—
Proceeds from long-term debt		182,000			—			—			—		182,000
Principal payments on long-term debt		(122,000	)		—			—			—		(122,000	)
Payments for deferred loan costs		(371	)		—			—			—		(371	)
Dividend paid to Denver Parent Corporation		(3,905	)										(3,905	)

Net cash provided by (used in) financing activities		64,110			(894	)		(7,492	)		—		55,724

Net increase (decrease) in cash and cash equivalents		13,958			—			—			—		13,958
Cash and cash equivalents, beginning of period		828			—			—			—		828

Cash and cash equivalents, end of period	$	14,786		$	—		$	—		$	—	$	14,786

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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operation

The following discussion and analysis should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Venoco / DPC Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014 as well as with the financial statements and related notes and the other information appearing elsewhere in this report.

Overview

We are an independent energy company primarily engaged in the acquisition, exploration, exploitation and development of oil and natural gas properties. Our strategy is to grow through exploration, exploitation and development projects we believe to have the potential to add significant reserves on a cost- effective basis and through selective acquisitions of underdeveloped properties. In the execution of our strategy, our management is principally focused on economically developing additional reserves and on maximizing production levels through exploration, exploitation and development activities in a manner consistent with preserving adequate liquidity and financial flexibility. ~~We currently conduct our operations in one reportable geographical segment—the United States.~~

Recent Developments

OnWe ~~August 18,~~completed ~~2014,~~the ~~Venoco~~going ~~entered~~private ~~into~~transaction ain ~~Purchase~~October 2012 and ~~Sale~~incurred ~~Agreement~~a ~~for~~substantial ~~the~~amount ~~sale~~of additional debt in order to do so. We have undertaken a variety of measures to reduce our indebtedness, including sales of our Sacramento Basin and West Montalvo ~~properties~~assets. ~~for~~However, our deleveraging efforts have been impacted by various ~~$200.2 million~~operational issues, ~~subject~~including toan ~~certain~~extended ~~closing~~shutdown ~~adjustments.~~of ~~The~~the ~~sale~~pipeline ~~was~~that ~~completed~~transports onour ~~October 29,~~South Ellwood field production in 2014 and ~~the~~apparent ~~company~~communication ~~applied~~affecting ~~100%~~production from some of our wells in the ~~net~~same ~~proceeds~~field. toMore ~~reduce~~recently, ~~the~~our ~~principal~~deleveraging ~~balance outstanding~~efforts onhave ~~Venoco's~~also ~~revolving~~been ~~credit~~affected ~~facility.~~by ~~The~~the ~~assets~~dramatic ~~included~~decline in the ~~sale~~price ~~had~~of ~~proved~~oil ~~reserves~~that ofoccurred ~~approximately~~over ~~7,302~~the ~~MBOE~~second ashalf of ~~December 31~~2014, ~~2013~~with low prices continuing into 2015. ~~Production~~We ~~from~~have ~~those~~been ~~assets~~required ~~averaged 1,614 BOE/d~~to inobtain ~~2013~~numerous ~~and~~amendments ~~1,415~~to ~~BOE/d~~and inwaivers from the ~~first~~lenders ~~nine~~under ~~months~~Venoco's revolving credit facility as a result of ~~2014~~these factors, and we have significantly curtailed our planned capital expenditures for 2015 relative to prior years.

We recently completed a series of financing transactions in response to our indebtedness and liquidity situation. On April 2, 2015, Venoco entered into agreements relating to three new debt instruments: (i) first lien senior secured notes with an aggregate principal amount of $175 million (the "first lien secured notes"), (ii) second lien senior secured notes with an aggregate principal amount of $150 million (the "second lien secured notes") and (iii) a $75 million cash collateralized senior secured credit facility (the "term loan facility"). Approximately $72 million of proceeds from the issuance of the first lien secured notes and the term loan facility were used to repay all amounts outstanding under Venoco's revolving credit facility, which was then terminated. The second lien secured notes were issued in exchange for $194 million aggregate principal amount of, and accrued interest on, Venoco's outstanding 8.875% senior notes due 2019. The terms of the new debt instruments are summarized in "—Liquidity and Capital Resources—Capital Resources and Requirements." These transactions

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increased our indebtedness overall, but reduced our near-term cash interest expense and provided us with flexibility and additional liquidity that we intend to use to advance longer term projects.

Capital Expenditures

Our ~~2014~~2015 development, exploitation and exploration capital expenditure budget is $8818 million, of which approximately $8416.5 million is expected to be devoted to our legacy Southern California assets and approximately $41.5 million to onshore Monterey shale activities. In the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 our development, exploitation and exploration capital expenditures were $723.18 million, with approximately $683.90 million incurred for Southern California legacy projects and $20.38 million for onshore Monterey projects.

The aggregate levels of capital expenditures for the remainder of ~~2014~~2015, ~~will~~and bethe ~~slightly~~allocation ~~less~~of ~~than~~those expenditures, are dependent on a variety of factors, including changes in commodity prices, permitting matters, the availability of capital resources to fund the expenditures and changes in our ~~budget~~business assessments as to where our capital can be most profitably employed. Accordingly, the actual levels of capital expenditures and the allocation of those expenditures may vary materially from our estimates. The following summarizes certain significant aspects of our ~~2014 capital~~2015 capital spending program.

In the first ~~nine~~quarter ~~months~~ of ~~2014~~2015, ~~production~~we ~~from~~focused ~~the~~our ~~South~~capital ~~Ellwood~~spending ~~field~~primarily ~~was~~on ~~adversely~~operational ~~affected~~improvements, byregulatory, ahealth, ~~prolonged~~safety ~~shutdown~~and ofenvironmental ~~the~~compliance ~~third~~and ~~party~~progressing ~~pipeline~~other ~~that~~long lead-time ~~delivers~~projects, ~~oil~~primarily ~~from~~at ~~the~~our ~~field~~legacy Southern California assets. ~~In order~~The toaggregate ~~minimize~~levels ~~full-year~~of ~~2014~~capital ~~downtime,~~expenditures wethrough ~~moved~~the ~~our~~first ~~annual~~quarter ~~South~~of ~~Ellwood~~2015 ~~maintenance~~were ~~shutdown~~relatively ~~from~~in-line with our budget estimates.

33 In the third quarter of 2014 our application to adjust the lease line at the South Ellwood field was deemed complete by the California State Lands Commission ("CSLC"). The application is subject to review by the CSLC under the California Environmental Quality Act ("CEQA"). In the first quarter of 2015 CSLC initiated efforts on the environmental impact review and related report as required by CEQA. We anticipate that the review period will be approximately one year from the initiation of the EIR, but it could be longer. Our application may not be granted on the terms we request or at all.

During the first quarter of 2015 in the Sockeye field, we focused capital spending primarily on advancing long lead-time projects and on operational improvements. We spent $0.2 million on onshore Monterey shale activities during the first quarter of 2015, primarily on land and leasehold rental payments.

With respect to our reversionary interest in the Hastings Complex CO₂ project being developed by Denbury, in January 2013 Venoco notified Denbury that it was invoking the arbitration provisions contained in contracts relating to the project. The dispute involves the calculation of the cost of CO₂ delivered to the Hastings Complex which is used in Denbury's enhanced oil recovery operations. Venoco believes that Denbury has materially overcharged the payout account for the cost of CO₂ and the cost of transporting it to the Hastings Complex. In December 2013 a three member arbitration panel ruled unanimously that Venoco's interpretation of the contracts was correct. In January 2014, Denbury requested that the arbitration panel modify its decision in a way that could increase the cost of CO₂ delivered to the Hastings Complex. In March 2014, the arbitration panel affirmed its decision consistent with Venoco's position. In late March 2014 Denbury filed a petition in Harris County Texas District Court to modify and vacate the arbitration award. In May 2014 Venoco filed an opposition to Denbury's petition and requested that the Texas District Court confirm the arbitration award. On February 11, 2015 the District Court granted Venoco's motion to confirm the arbitration award. On March 12^th, Denbury filed a motion for a new trial with the District Court. On May 12^th, Denbury notified Venoco they were appealing the District Court's ruling.

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October up to March to coincide with the pipeline shutdown. In addition, we have determined that certain wells near the field's lease boundary are in communication, and, as a result, we have no current plans to drill additional wells in that area. However, production rates from the most productive wells in the area have stabilized.

The Coal Oil Point structure is located on the north east side of the South Ellwood field. We successfully completed a well drilled to a probable location in the Coal Oil Point structure in the second half of 2013. In the first nine months of 2014, we drilled another Coal Oil Point well. The lowest zone of the well tested wet, but in August, we completed a higher zone of the well, which proved to be hydrocarbon bearing and was placed on initial production on August 20, 2014. This zone initially produced at an average rate approximately 450 Bbls/d.

We have submitted an application to adjust the lease line at the South Ellwood field. If made, the adjustment could significantly increase the reserves associated with the field. Our application, which has now been deemed complete by the California State Lands Commission ("CSLC"), will be subject to review by the CSLC under the California Environmental Quality Act. We anticipate that the review period will be approximately one year, but it could be longer. Our application may not be granted on the terms we request or at all.

In the West Montalvo field, during the first nine months of 2014, we spud two new locations and completed two wells spud in 2013.

During the first nine months of 2014, we performed one recompletion at Sockeye and began drilling one development well in the M-2 zone from Platform Gail. Previous to drilling this infill development well, we were producing from the Sockeye M-2 zone, and we believed it to be underdeveloped. The well began producing on October 15, 2014 and initially produced approximately 610 Bbls/d.

We spent $0.4 million on onshore Monterey shale activities in the first nine months of 2014 and plan to spend an additional $0.3 million (excluding capitalized G&A) in the last three months of 2014 to improve and stabilize production in the Sevier field.

With respect to our reversionary interest in the Hastings Complex CO2 project being developed by Denbury Resources, Inc. ("Denbury"), in January 2013 Venoco notified Denbury that it was invoking the arbitration provisions contained in contracts relating to the project. The dispute involves the calculation of the cost of CO2 delivered to the Hastings Complex which is used in Denbury's enhanced oil recovery operations. Venoco believes that Denbury has materially overcharged the payout account for the cost of CO2 and the cost of transporting it to the Hastings Complex. In December 2013 a three member arbitration panel ruled unanimously that Venoco's interpretation of the contracts was correct. In January 2014, Denbury requested that the arbitration panel modify its decision in a way that could increase the cost of CO2 delivered to the Hastings Complex. In March 2014, the arbitration panel affirmed its decision consistent with Venoco's position. In late March 2014 Denbury filed a petition in Harris County Texas District Court to modify and vacate the arbitration award. In May 2014 Venoco filed an opposition to Denbury's petition and requested that the Texas District Court confirm the arbitration award. Venoco believes that the court will uphold the arbitration award.

As of September 30, 2014, Venoco estimates that the proved reserves and PV-10 associated with its reversionary interest in the Hastings Complex were 8.9 MMBOE and $127 million, respectively.

Trends Affecting our Results of Operations

~~The~~Oil ~~company~~and ~~experienced~~Natural ~~reduced~~Gas ~~income~~Prices. Historically, ~~from~~prices ~~operations~~received for ~~the~~our ~~first~~oil ~~nine~~and ~~months~~natural ofgas ~~2014~~production ~~compared~~have been volatile and unpredictable, and that volatility is expected to continue. Changes in the ~~first~~market ~~nine~~prices ~~months~~for oil directly impact many aspects of ~~2013~~our business, ~~due~~including our financial condition, revenues, results of operations, liquidity, ~~primarily~~rate toof ~~production~~growth, carrying value of our properties and ~~pricing~~value ~~declines.~~of ~~However~~our proved reserves, weall ~~had~~of awhich ~~significant~~depend ~~increase~~in part upon those prices. We therefore expect to have minimal exposure to changes in ~~net~~natural ~~income~~gas prices asfor the foreseeable future. Due to continued depressed commodity prices, we currently expect to recognize a ~~result~~non-cash ofceiling ~~changes~~test impairment charge in the ~~valuation~~second quarter of ~~our~~2015. ~~hedging~~

34 We employ a hedging strategy designed to reduce the variability in cash flows resulting from changes in commodity prices. As of March 31, 2015, we had hedge contract floors covering 4,595 barrels of oil per day for 2015. We have also secured hedge contracts for portions of our 2016 production. See "Quantitative and Qualitative Disclosures About Market Risk—Commodity Derivative Transactions" for further details concerning our hedging activities.

Production. Average BOE per day for the first quarter of 2015 was 6,016 compared to 6,612 for the year ended 2014. The reduction in production is due the sale of West Montalvo. Our 2015 capital spending has been allocated approximately 92% to our legacy Southern California fields and 8% to our onshore Monterey shale program. In light of current commodity prices and our need to preserve liquidity, we have substantially reduced our capital expenditure budget for 2015. This capital program is focused on operational improvements, meeting regulatory and EHS requirements, and progressing long lead-time projects. As a result, we expect production to decline year over year from 2014.

Lease Operating Expenses. Lease operating expenses ("LOE") of $27.55 per BOE for the first quarter of 2015 were higher than our full year 2014 results of $26.77 per BOE. However, we expect that our LOE per BOE for the full year 2015 will be generally consistent with 2014.

Property and Production Taxes. Property and production taxes of $3.93 per BOE for the first quarter of 2015 were higher than our full year 2014 results of $2.82 per BOE. We expect our 2015 property and production taxes to be higher on a per BOE basis than they were in 2014. Our ad valorem tax expense is highly sensitive to drilling results and the estimated present value of future net cash flows from new wells, and may be volatile in the future.

General and Administrative Expenses. General and administrative expenses were $12.24 per BOE (excluding non-cash share-based compensation charges of $0.07 per BOE) for the first quarter of 2015 compared to $8.39 per BOE for the full year 2014 (excluding non-cash share-based compensation decreases of $1.01 per BOE). During 2014 we implemented a reduction in work force program to reduce our overhead to be more reflective of the asset base we have following the Sacramento Basin and West Montalvo asset sales. Excluding share-based compensation charges and certain one-time charges, we expect our 2015 G&A costs to be less than they were in 2014, but, on a per BOE basis, to increase in 2015 compared to 2014 due to our lower expected production in 2015.

Depreciation, Depletion and Amortization (DD&A). DD&A for the first quarter of 2015 was $16.27 per BOE compared to $16.31 per BOE for the full year 2014. We expect our 2015 DD&A to be similar on a per BOE basis compared to our 2014 results.

Commodity Derivative Gains and Losses. We do not account for commodity derivative contracts as cash flow hedges. Commodity derivative gains and losses include settlements of commodity derivative contracts, changes in fair value of open commodity derivative contracts and amortization of derivative premiums. The fair value of the open commodity derivative instruments will continue to change in value until the transactions are settled. Therefore, we expect our net income to reflect the volatility of commodity price forward markets. Our cash flows will only be affected upon settlement of the

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~~positions~~transactions inat the ~~third~~current ~~quarter~~market prices at that time. Cash settlement of ~~2014~~derivative instruments represents the difference between the strike prices in contracts settled during the period and athe ultimate ~~loss~~settlement prices. Payments actually due to or from counterparties on ~~extinguishment~~these ofderivatives ~~debt~~will ~~recorded~~typically be offset by corresponding changes in prices ultimately received from the ~~third~~sale ~~quarter~~of our production. We have incurred significant commodity derivative gains and losses in recent periods and may continue to incur these types of ~~2013~~gains and losses in the future.

~~Oil~~Income ~~and~~Tax ~~Natural~~Provision ~~Gas Prices~~(Benefit). ~~Historically,~~We ~~prices~~incurred ~~received~~losses ~~for~~before ~~our~~income ~~production~~taxes ~~have~~in ~~been~~2008, ~~volatile~~2009, and ~~unpredictable~~2012, ~~and~~as ~~that~~well ~~volatility~~as taxable losses in each of isthe ~~expected~~tax toyears ~~continue~~from 2008 through 2013. ~~Changes~~These inlosses ~~the~~and ~~market~~expected ~~prices~~future ~~for~~taxable ~~oil~~losses ~~directly~~were ~~impact~~key ~~many~~considerations ~~aspects~~that ofled ~~our~~us ~~business,~~to ~~including~~conclude that we should maintain a full valuation allowance against our ~~financial~~net ~~condition,~~deferred ~~revenues~~tax assets at December 31, ~~results~~2014 ofand ~~operations~~March 31, ~~liquidity,~~2015 ~~rate~~since ofwe ~~growth,~~could ~~carrying~~not conclude that it is more likely than not that the net deferred tax assets will be fully realized. As long as we continue ~~value~~to ofconclude that we have a need for a full valuation allowance against our ~~properties~~net deferred tax assets, ~~value~~we oflikely ~~our~~will ~~proved~~not ~~reserves~~have ~~and~~any ~~borrowing~~income ~~capacity~~tax ~~under~~expense ~~Venoco's~~or ~~revolving~~benefit ~~credit~~other ~~facility,~~than ~~all~~for offederal ~~which~~alternative ~~depend~~minimum tax inexpense ~~part~~or ~~upon~~for ~~those~~state ~~prices~~income taxes. WeFuture ~~expect~~events or new evidence which may lead us to ~~have~~conclude ~~only~~that ~~modest~~it is more likely than not that our net deferred tax assets will be realized include, but are ~~exposure~~not limited to, ~~changes~~cumulative historical pre-tax earnings; consistent and sustained pre-tax earnings; sustained or continued improvements in oil and natural gas commodity prices; ~~for~~meaningful incremental oil production and proved reserves from development efforts at our Southern California legacy properties; meaningful production and proved reserves from the ~~foreseeable~~CO2 project at the Hastings Complex; and taxable events resulting from one or more deleveraging transactions. We will continue to evaluate whether the valuation allowance is needed in future reporting periods.

We employ a hedging strategy designed to reduce the variability in cash flows resulting from changes in commodity prices. As of September 30 2014, we had hedge contract floors covering 6,175 barrels of oil per day and 2,000 Mcf per day of natural gas for the remainder of 2014. We have also secured hedge contracts for portions of our 2015 and 2016 production. See "Quantitative and Qualitative Disclosures About Market Risk—Commodity Derivative Transactions" for further details concerning our hedging activities.

Expected Production. Our 2014 capital spending has been allocated approximately 95% to our legacy Southern California fields and 5% to our onshore Monterey shale program. As discussed above, our first nine months of production were adversely affected by a prolonged shutdown of the pipeline that transports our South Ellwood field oil, and we have experienced declines in production from certain wells drilled in recent years at our South Ellwood, Sockeye and West Montalvo fields. In addition, we have experienced delays in the completion of the Coal Oil Point well, the lowest zone of which was unproductive, and delays in converting newly drilled wells at West Montalvo from a no-flow status to artificial lift. Furthermore, the operator of the pipeline that transports our South Ellwood oil conducted another pipeline shutdown in October 2014. The shutdown lasted five days and was completed October 17, 2014. For these reasons, we expect production for 2014 to be down compared to 2013.

The factors that negatively affected our production during the first nine months of 2014 had a corresponding negative impact on our per BOE expense metrics for the period.

We have not yet established a capital expenditures budget for 2015. However, we expect that constraints on our liquidity will significantly limit our 2015 spending.

Lease Operating Expenses. Lease operating expenses ("LOE") of $26.67 per BOE for the first nine months of 2014 were higher than our full year 2013 results of $22.44 per BOE. We expect that our LOE per BOE for the full year 2014 will be slightly higher than 2013 because of lower production experienced in the first nine months of the year and expected for the remainder of 2014. Full year 2014 LOE on an aggregate basis is expected to lower than in 2013 due to the sale of West Montalvo and lower share based compensation.

Property and Production Taxes. Property and production taxes of $2.93 per BOE for the first nine months of 2014 were higher than our full year 2013 results of $1.02 per BOE. We expect our 2014 property and production taxes to be higher on a per BOE basis than they were in 2013. Our ad valorem tax expense is highly sensitive to drilling results and the estimated present value of future net cash flows from new wells, and may be volatile in the future.

General and Administrative Expenses. General and administrative expenses were $9.07 per BOE (excluding non-cash share-based compensation charges and one-time G&A costs of $1.44 per BOE) for the first nine months of 2014 compared to $11.75 per BOE for the full year 2013 (excluding non-cash share-based compensation charges of $2.79 per BOE). We expect our 2014 G&A costs to be less than they were in 2013 on an aggregate and per BOE basis. DPC incurs only nominal general and administrative expenses.

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Depreciation, Depletion and Amortization (DD&A). DD&A for the first nine months of 2014 was $16.58 per BOE compared to $14.09 per BOE for the full year 2013. We expect our 2014 DD&A to be slightly higher on a per BOE basis compared to our 2013 results.

Commodity Derivative Gains and Losses. We do not account for commodity derivative contracts as cash flow hedges. Commodity derivative gains and losses include settlements of commodity derivative contracts, changes in fair value of open commodity derivative contracts and amortization of derivative premiums. The fair value of the open commodity derivative instruments will continue to change in value until the transactions are settled. Therefore, we expect our net income to reflect the volatility of commodity price forward markets. Our cash flows will only be affected upon settlement of the derivative transactions at the current benchmark prices at that time. Cash settlement of derivative instruments represents the difference between the strike prices in contracts settled during the period and the ultimate benchmark settlement prices. Payments actually due to or from counterparties on these derivatives will typically be offset by corresponding changes in prices ultimately received from the sale of our production. We have incurred significant commodity derivative gains and losses in recent periods and may continue to incur these types of gains and losses in the future.

Income Tax Provision (Benefit). DPC has incurred losses before income taxes in 2008, 2009, 2012 and 2013 as well as taxable losses in each of the tax years from 2008 through 2013. Venoco has incurred losses before income taxes in 2008, 2009, and 2012 as well as taxable losses in each of the tax years from 2008 through 2013. These losses and expected future taxable losses were key considerations that led us to conclude that we should maintain a full valuation allowance against our net deferred tax assets at December 31, 2013 and September 30, 2014 since we could not conclude that it is more likely than not that the net deferred tax assets will be fully realized. As long as we continue to conclude that we have a need for a full valuation allowance against our net deferred tax assets, we likely will not have any income tax expense or benefit other than for federal alternative minimum tax expense or for state income taxes. Future events or new evidence which may lead us to conclude that it is more likely than not that our net deferred tax assets will be realized include, but are not limited to, cumulative historical pre-tax earnings; consistent and sustained pre-tax earnings; sustained or continued improvements in oil prices; meaningful incremental oil production and proved reserves from development efforts at our Southern California legacy properties; meaningful production and proved reserves from the CO2 project at the Hastings Complex; and taxable events resulting from one or more deleveraging transactions. We will continue to evaluate whether the valuation allowance is needed in future reporting periods.

Our expectations with respect to future production rates, expenses and the other matters discussed above are subject to a number of uncertainties, including those discussed and referenced in "Risk Factors." For example, with respect to future production rates, uncertainties include those associated with third party services, limitations on capital expenditures resulting from the terms of our debt agreements, the availability of drilling rigs, oil prices, events resulting in unexpected downtime, permitting issues and drilling success rates.

Results of Operations

The following table reflects the components of our oil and natural gas production and sales prices, and our operating revenues, costs and expenses, for the periods indicated. No pro forma adjustments have been made for the acquisitions and divestitures of oil and natural gas properties, which will affect the comparability of the data below. The information set forth below is not necessarily indicative of

3633

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future results. Except for the items identified below as being specific to Venoco or DPC, all information shown is for both companies.

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2013			2014			2013			2014
	2014			2015
Production Volume(1):
Oil (MBbls)		~~786~~655			~~642~~515			~~2,449~~			~~1,978~~
Natural gas (MMcf)		~~272~~269			~~202~~160			~~1,412~~			~~702~~
MBOE(2)		~~831~~700			~~676~~542			~~2,684~~			~~2,095~~
Daily Average Production Volume:
Oil (Bbls/d)		87,~~543~~278			65,~~978~~719			~~8,971~~			~~7,245~~
Natural gas (Mcf/d)		2,~~957~~989			21,~~196~~784			~~5,172~~			~~2,571~~
BOE/d(2)		97,~~036~~776			76,~~344~~016			~~9,833~~			~~7,674~~
Oil Price per Bbl Produced (in dollars):
Realized price	$	9994.1655		$	8738.8417		$	~~97.36~~		$	~~92.74~~
Realized commodity derivative gain (loss)		(5.4238	)		(228.1486	)		~~(5.93~~	)		~~(4.77~~	)

Net realized price	$	9389.7417		$	8567.7003		$	~~91.43~~		$	~~87.97~~


Natural Gas Price per Mcf (in dollars):

Realized price	$	4.19		$	4.98		$	3.97		$	5.51
Natural Gas Price per Mcf (in dollars):
Realized commodity derivative gain (loss)		—			.11			—			.03
Realized price	$	6.06		$	3.18

Realized commodity derivative gain (loss)		—			—
Net realized price	$	4.19		$	5.09		$	3.97		$	5.54


Net realized price	$	6.06		$	3.18

Expense per BOE:

Lease operating expenses	$	21.99		$	26.96		$	20.39		$	26.67

Property and production taxes		(0.57	)		3.14			0.77			2.93
Expense per BOE:
Transportation expenses		0.06			0.08			0.05			0.07
Lease operating expenses	$	27.81		$	27.55
Depreciation, depletion and amortization		15.10			17.39			13.61			16.58
Property and production taxes		2.48			3.93
Venoco:
Transportation expenses		0.08			0.09
General and administrative expense, net(3)		6.45			2.00			11.44			9.07
Depreciation, depletion and amortization		15.97			16.27
Interest expense		18.86			20.17			19.35			19.06
Venoco:
Denver Parent Corporation:
General and administrative expense, net(3)		12.37			12.31
General and administrative expense, net(3)		6.48			2.08			11.50			9.26
Interest expense		18.49			21.05
Interest expense		25.40			33.45			24.34			31.27
Denver Parent Corporation:
General and administrative expense, net(3)		12.74			12.43
Interest expense		30.18			38.16

(1): Amounts shown are oil production volumes for offshore properties and sales volumes for onshore properties (differences between onshore production and sales volumes are minimal). Revenue accruals are adjusted for actual sales volumes since offshore oil inventories can vary significantly from month to month based on pipeline inventories and oil pipeline sales nominations.
(2): BOE is determined using the ratio of one barrel of oil or natural gas liquids to six Mcf of natural gas.
(3): Net of amounts capitalized.

Comparison of Quarter Ended ~~September~~March 3031, ~~2014~~2015 to Quarter Ended ~~September~~March 3031, ~~2013~~2014

Oil and Natural Gas Sales. Oil and natural gas sales decreased $2242.58 million (2868%) to $5719.27 million in the ~~third~~first quarter of ~~2014~~2015 compared to $7962.75 million in the ~~third~~first quarter of ~~2013~~2014. The decrease was ~~mainly~~ due to lower oil and natural gas production, and lower oil prices, as described below.

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Oil sales decreased by $2241.47 million (2868%) in the ~~third~~first quarter of ~~2014~~2015 to $5619.2 million compared to $7860.69 million in the ~~third~~first quarter of ~~2013~~2014. Oil production decreased by 1821%, with production of ~~642~~515 MBbls in the ~~third~~first quarter of ~~2014~~2015 compared to ~~786~~655 MBbls in the ~~third~~first quarter of ~~2013~~2014. The decrease is primarily due to ~~lower~~the ~~production~~sale atof our ~~South Ellwood, Sockeye and~~ West Montalvo Field ~~fields resulting from production declines from new wells drilled~~ in ~~recent years at these three fields, production at South Ellwood being curtailed during~~ the ~~drilling~~ offourth ~~the~~quarter ~~Coal Oil Point well, and lost production from a significant well at Sockeye that was shut in for replacement~~ of ~~an electric submersible pump~~2014. Our average realized price for oil decreased $1156.3238 per Bbl (1160%) from $9994.1655 per Bbl in the ~~third~~first quarter of ~~2013~~2014 to $8738.8417 per Bbl for the ~~third~~first quarter of ~~2014~~2015.

Natural gas sales decreased by $01.1 million (1269%) in the ~~third~~first quarter of ~~2014~~2015 to $1.0.5 million compared to $1.16 million in the ~~third~~first quarter of ~~2013~~2014. Natural gas production decreased by 2640% in the ~~third~~first quarter of ~~2014~~2015, with production of ~~202~~160 MMcf compared to ~~272~~269 MMcf in the ~~third~~first quarter of ~~2013~~2014. The decrease is primarily due to the sale of our West Montalvo assets. Our average realized price for natural gas decreased ~~increased~~ $02.7988 per Mcf (1948%) from $46.1906 per Mcf in the ~~third~~first quarter of ~~2013~~2014 to $43.9818 per Mcf in the ~~third~~first quarter of ~~2014~~2015.

Other Revenues. Other revenues ~~decreased~~increased $0.62 million in the ~~third~~first quarter of ~~2014~~2015 to $0.67 million compared to $10.25 million in the ~~third~~first quarter of ~~2013~~2014. The ~~decrease~~increase is primarily due to ~~lower~~higher pipeline revenue in the ~~third~~first quarter of ~~2014~~2015.

Lease Operating Expenses. Lease operating expenses ("LOE") decreased $04.16 million (24%) in the ~~third~~first quarter of ~~2014~~2015 to $1814.29 million compared to $1819.35 million in the ~~third~~first quarter of ~~2013~~2014. ~~However,~~The decrease was primarily due to the sale of the West Montalvo field in the fourth quarter of 2014, as well as lower ~~production~~lease onoperating expenses at the South Ellwood and Sockeye fields. On a per unit basis, LOE ~~increased~~decreased by $40.9726 per BOE from $2127.9981 in the ~~third~~first quarter of ~~2013~~2014 to $2627.96 55 in the ~~third~~first quarter of ~~2014~~2015.

Property and Production Taxes. Property and production taxes increased $20.64 million (~~550~~24%) in the ~~third~~first quarter of ~~2014~~2015 to $2.1 million compared to $(01.5) 7 million in the ~~third~~first quarter of ~~2013~~2014. The increase is primarily due to ~~revised~~higher ~~year-to-date supplemental~~ property ~~tax~~taxes ~~estimates~~from ~~that~~prior ~~were~~drilling ~~recorded~~results inat ~~the~~our ~~third~~South ~~quarter~~Ellwood ~~of 2013~~field. On a per BOE basis, property and production taxes increased $31.7145 per BOE to $3.1493 in the ~~third~~first quarter of ~~2014~~2015 from $(02.~~57)~~48 in the ~~third~~first quarter of ~~2013~~2014.

Depletion, Depreciation and Amortization (DD&A). DD&A expense decreased $02.84 million (621%) to $118.8 million in the ~~third~~first quarter of ~~2014~~2015 compared to $1211.62 million in the ~~third~~first quarter of ~~2013~~2014. The decrease was primarily due to ~~lower~~the ~~production~~sale of the West Montalvo assets in the third quarter of 2014. DD&A expense on a per unit basis increased $20.2940 per BOE to $1716.3927 per BOE for the ~~third~~first quarter of ~~2014~~2015 compared to $15.1097 per BOE for the ~~third~~first quarter of ~~2013~~2014.

~~Impairment~~ Accretion of Abandonment Liability. WeAccretion ~~did~~expense ~~not~~decreased ~~record~~$0.2 million ~~any~~(29%) ~~impairment~~ to ~~oil~~$0.5 million ~~and~~in ~~gas~~the ~~properties~~first quarter of 2015 compared to $0.7 million in the ~~third~~first quarter of ~~2013 or~~ 2014.

Accretion of Abandonment Liability. Accretion expense remained constant at $0.6 million in the third quarter of 2014 and 2013.

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General and Administrative (G&A). The following table summarizes the components of Venoco's general and administrative expense incurred during the periods indicated (in thousands):

	Three Months Ended September 30,
	Three Months Ended March 31,
	2013			2014
	2014			2015
General and administrative costs	$	1013,~~899~~250		$	89,~~374~~256
Share-based compensation costs		(2,890	)		(6,173	)
Share-based compensation costs capitalized		(857	)		(48	)
General and administrative costs capitalized		(23,~~651~~731	)		(~~849~~2,538	)

General and administrative expense, net of amounts capitalized	$	58,~~358~~662		$	16,~~352~~670

Venoco G&A expenses decreased $2.5 million (23%) to $8.4 million in the third quarter of 2014 compared to $10.9 million in the third quarter of 2013. The decrease is due to lower employee related G&A costs and lower share-based compensation of $3.6 million (net of amount capitalized) charged to G&A in the third quarter of 2014 compared to $2.2 million (net of amount capitalized) in the third quarter of 2013. The lower employee related G&A costs and share based compensation expenses are due to decreases in personnel and the recapture of related share-based compensation expense previously recognized due to the lower estimated value of DPC stock. Excluding the effect of the non-cash share-based compensation expense, G&A expense decreased to $7.29 per BOE in the third quarter of 2014 from $9.26 per BOE in the third quarter of 2013. 35

DPC incurred incremental G&A expenses of $0.1 million during the third quarters of 2013 and 2014.

Interest Expense. For Venoco, interest expense decreased $2.0 million (13%) to $13.6 million in the third quarter of 2014 compared to $15.6 million in the third quarter of 2013. The decrease was primarily the result of the repayment of Venoco's 11.50% $150 million senior notes in the third quarter of 2013. For DPC, interest expense increased $1.5 million (7%) to $22.6 million in the third quarter of 2014 compared to $21.1 million in the third quarter of 2013. The incremental difference of $8.9 million from Venoco's total interest expense to DPC's total consolidated interest expense was due to interest on DPC's 12.25% / 13.00% senior PIK toggle notes.

Amortization of Deferred Loan Costs. For Venoco, amortization of deferred loan costs remained constant at $0.9 million in the third quarter of 2014 and 2013. For DPC, amortization of deferred loan costs remained constant at $1.2 million in the third quarter of 2014 and 2013. The costs incurred relate to our loan agreements and are amortized over the estimated lives of the agreements.

Commodity Derivative Losses (Gains), Net. The following table sets forth the components of commodity derivative losses (gains), net in our condensed consolidated statements of operations for the periods indicated (in thousands):

	Three Months Ended September 30,
	2013		2014
Realized commodity derivative losses (gains)	$	4,261	$	1,355
Amortization of commodity derivative premiums		1,017		1,204
Unrealized commodity derivative losses (gains) for changes in fair value		8,893		(32,895	)

Commodity derivative losses (gains), net	$	14,171	$	(30,336	)

Realized commodity derivative gains or losses represent the difference between the strike prices in the contracts settled during the period and the ultimate benchmark settlement prices. The realized

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~~commodity derivative~~ Venoco ~~losses~~G&A inexpenses ~~the~~decreased ~~third~~$2.0 million ~~quarter~~(23%) ofto ~~2013~~$6.7 million ~~and~~in ~~2014 reflect~~ the ~~settlement~~first quarter of ~~contracts~~2015 atcompared ~~benchmark~~to ~~prices above the relevant strike prices~~$8.7 million ~~In addition,~~ in the ~~third~~first quarter of ~~2013, we~~2014. ~~settled~~The ~~all~~decrease ofis ~~our~~due ~~basis~~to ~~swaps,~~lower ~~realizing~~employee ~~total~~related ~~losses~~G&A ofcosts ~~$3.6 million.~~as ~~Unrealized~~a ~~commodity~~result ~~derivative~~of ~~(gains)~~the ~~losses~~reduction ~~represent~~in ~~the~~work ~~change~~force inprogram ~~the~~introduced ~~fair~~in ~~value~~2014 ofto reduce our ~~open~~overhead ~~derivative~~to ~~contracts from~~be ~~period~~more toreflective ~~period.~~of ~~Derivative~~the ~~premiums~~asset ~~are~~base ~~amortized~~we have ~~over~~following the ~~term~~Sacramento ofBasin ~~the~~and ~~underlying~~West ~~derivative~~Montalvo ~~contracts~~asset sales.

~~Income~~ DPC incurred ~~Tax~~nominal ~~Expense~~G&A ~~(Benefit). Due~~expenses toduring ~~our~~the ~~valuation~~first ~~allowance,~~quarter ~~there~~of ~~was~~2015 noof ~~income tax expense (benefit) recorded for the quarters ended September~~$0.1 ~~30, 2014 or 2013~~million. As long as we continue to conclude that we have a need for a full valuation allowance against our net deferred tax assets, we likely will not have any income tax expense or benefit other than for federal alternative minimum tax expense or for state income taxes.

~~Net~~ Interest ~~Income (Loss)~~Expense. For Venoco, ~~the~~interest ~~net~~expense ~~income~~decreased ~~for~~$1.5 million ~~the~~(12%) ~~third~~to ~~quarter of 2014 was~~ $3911.54 million ~~compared~~in tothe ~~net~~first ~~loss~~quarter of 2015 compared to $212.9 million ~~for~~ in the ~~same~~first ~~period~~quarter inof ~~2013~~2014. ~~For~~The ~~DPC,~~decrease was primarily the ~~net~~result ~~income~~lower ~~for~~total outstanding borrowings on the ~~third~~revolving ~~quarter~~credit offacility. ~~2014~~For ~~was~~DPC, interest expense decreased $300.24 million ~~compared~~(2%) to ~~net~~$20.7 million ~~loss~~in the first quarter of 2015 compared to $2821.61 million ~~for~~in the ~~same~~first ~~period~~quarter inof ~~2013~~2014. The ~~changes~~incremental ~~between~~difference of $9.3 million from ~~periods~~Venoco's ~~are~~total ~~the~~interest ~~result~~expense ofto ~~the~~DPC's ~~items~~total ~~discussed~~consolidated ~~above~~interest ~~and~~expense ~~the~~was ~~loss~~due onto ~~extinguishment~~interest ofon ~~debt~~DPC's ~~recognized~~12.25% in/ ~~the~~13.00% ~~third~~senior ~~quarter~~PIK oftoggle ~~2013~~notes.

Amortization ~~Comparison~~of Deferred Loan Costs. For Venoco, amortization of ~~Nine~~deferred ~~Months~~loan ~~Ended~~costs ~~September~~decreased $0.2 ~~30,~~million ~~2014~~(25%) to $0.6 million ~~Nine~~in the ~~Months~~first ~~Ended~~quarter ~~September~~of 2015 compared to $0.8 30million in the first quarter of 2014. For DPC, ~~2013~~ amortization of deferred loan costs decreased $0.2 million (18%) to $0.9 million in the first quarter of 2015 compared to $1.1 million in the first quarter of 2014. The costs incurred relate to our loan agreements and are amortized over the estimated lives of the agreements.

Oil and Natural Gas Sales. Oil and natural gas sales decreased $60.8 million (25%) to $186.3 million in the nine months ended September 30, 2014 compared to $247.1 million in the nine months ended September 30, 2013. The decrease was primarily due to lower oil and natural gas production, as described below.

Oil sales decreased by $59.0 million (24%) in the first nine months of 2014 to $182.5 million compared to $241.5 million in the first nine months of 2013. Oil production decreased by 19%, with production of 1,978 MBbls in the first nine months of 2014 compared to 2,449 MBbls in the first nine months of 2013. The decrease is primarily due to lower production at our South Ellwood field in the first quarter of 2014 resulting from a prolonged shutdown of the third party pipeline that delivers our South Ellwood oil, lower production in the first nine months of 2014 at our South Ellwood, Sockeye and West Montalvo fields resulting from production declines from new wells drilled in recent years at these three fields, production at South Ellwood being curtailed during the drilling of the Coal Oil Point well, and lost production from a significant well at Sockeye that was shut in for the replacement of an electric submersible pump. Our average realized price for oil decreased $4.62 per Bbl (5%) from $97.36 per Bbl in the first nine months of 2013 to $92.74 per Bbl for the first nine months of 2014.

Natural gas sales decreased $1.7 million (31%) in the first nine months of 2014 to $3.9 million compared to $5.6 million in the first nine months of 2013. Natural gas production decreased by 50% in the first nine months of 2014, with production of 702 MMcf compared to 1,412 MMcf in the first nine months of 2013. The decrease is partly due to the sale of Sacramento Basin assets in 2013 and partly due to the reductions in oil production, and therefore associated natural gas production, as well as a reduction in gas sales from the Sockeye field in the first nine months of 2014 compared to the first nine months of 2013. Our average realized price for natural gas increased $1.54 per Mcf (39%) from $3.97 per Mcf in the first nine months of 2013 to $5.51 per Mcf in the first nine months of 2014.

Other Revenues. Other revenues decreased $1.9 million in the first nine months of 2014 to $1.5 million compared to $3.4 million in the first nine months of 2013. The decrease is primarily due to lower pipeline revenue in the first nine months of 2014.

Lease Operating Expenses. Lease operating expenses ("LOE") increased $1.2 million (2%) in the first nine months of 2014 to $55.9 million compared to $54.7 million in the first nine months of 2013. The increase was primarily due to the timing of the annual maintenance shutdown at our South Ellwood field. The shutdown occurred in the fourth quarter of 2013, however the annual shutdown was

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moved up to the first quarter of 2014 in order to correspond with the pipeline shutdown, higher unplanned repairs at Sockeye and higher well maintenance costs at Montalvo in the first nine months of 2014. The expenses incurred as a result of the annual maintenance shutdown occurred concurrently with a period of reduced production, which resulted in an increase in the per unit costs. On a per unit basis, LOE increased by $6.28 per BOE from $20.39 in the first nine months of 2013 to $26.67 in the first nine months of 2014.

Property and Production Taxes. Property and production taxes increased $4.0 million (197%) in the first nine months of 2014 to $6.1 million compared to $2.1 million in the first nine months of 2013. The increase is primarily due to revised year-to-date supplemental property tax estimates that were recorded in the third quarter of 2013. On a per BOE basis, property and production taxes increased $2.16 per BOE to $2.93 in the first nine months of 2014 from $0.77 in the first nine months of 2013.

Depletion, Depreciation and Amortization (DD&A). DD&A expense decreased $1.8 million (5%) to $34.7 million in the first nine months of 2014 compared to $36.5 million in the first nine months of 2013. The decrease was primarily due to lower production in the first nine months of 2014. DD&A expense on a per unit basis increased $2.97 per BOE to $16.58 per BOE for the first nine months of 2014 compared to $13.61 per BOE for the first nine months of 2013.

Impairment. We recorded an impairment to oil and gas properties of $0.8 million in the first nine months of 2014 for costs incurred related to the evaluation of certain South American properties. We abandoned further efforts to evaluate expansion outside the U.S.A. in the second quarter of 2014.

Accretion of Abandonment Liability. Accretion expense remained relatively constant at $1.9 million in the first nine months of 2014 and 2013.

General and Administrative (G&A). The following table summarizes the components of Venoco's general and administrative expense incurred during the periods indicated (in thousands):

	Nine Months Ended September 30,
	2013			2014
General and administrative costs	$	35,697		$	28,343
Share-based compensation costs		9,695			(3,055	)
One-time general and administrative		—			3,024
General and administrative costs capitalized		(14,684	)		(9,308	)

General and administrative expense, net of amounts capitalized	$	30,708		$	19,004

Venoco G&A expenses decreased $11.7 million (38%) to $19.0 million in the first nine months of 2014 compared to $30.7 million in the first nine months of 2013. The decrease is due to lower employee related G&A costs and lower share-based compensation of $1.5 million (net of amount capitalized) charged to G&A in the first nine months of 2014 compared to $7.4 million (net of amount capitalized) in the first nine months of 2013. The lower employee related G&A costs and share based compensation expenses are due to decreases in personnel and the recapture of related share-based compensation expense previously recognized due to the lower estimated value of DPC stock. Our G&A expenses for the period include one-time G&A costs relate to a write-off of $1.7 million of deferred costs relating to an MLP offering that was aborted in the second quarter of 2014, and severance costs of $1.3 million related to a G&A reduction that was initiated in the second quarter of 2014. Excluding the effect of the non-cash share-based compensation expense and one-time general and administrative charges, G&A expense decreased to $9.02 per BOE in the first nine months of 2014 from $11.00 per BOE in the first nine months of 2013.

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DPC incurred incremental G&A expenses during the first nine months of 2014 of $0.4 million compared to $0.2 million in the first nine months of 2013.

Interest Expense. For Venoco, interest expense decreased $12.0 million (23%) to $39.9 million in the first nine months of 2014 compared to $51.9 million in the first nine months of 2013. The decrease was primarily the result of the repayment of Venoco's 11.50% $150 million senior notes in the third quarter of 2013. For DPC, interest expense increased $0.2 million to $65.5 million in the first nine months of 2014 compared to $65.3 million in the first nine months of 2013. The incremental difference of $25.6 million from Venoco's total interest expense to DPC's total consolidated interest expense was due to interest on DPC's 12.25% / 13.00% senior PIK toggle notes.

Amortization of Deferred Loan Costs. For Venoco, amortization of deferred loan costs decreased $0.3 million (11%) to $2.6 million in the first nine months of 2014 compared to $2.9 million in the first nine months of 2013. For DPC, amortization of deferred loan costs decreased $0.4 million (10%) to $3.3 million in the first nine months of 2014 compared to $3.7 million in the first nine months of 2013. The costs incurred relate to our loan agreements and are amortized over the estimated lives of the agreements.

Commodity Derivative Losses (Gains), Net. The following table sets forth the components of commodity derivative losses (gains), net in our condensed consolidated statements of operations for the periods indicated (in thousands):

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2013			2014
	2014			2015
Realized commodity derivative losses (gains)	$	243,~~010~~525		$	9(14,~~409~~865	)
Amortization of commodity derivative premiums		2,984			3,612
Unrealized commodity derivative losses (gains) for changes in fair value		(5,620	)		1,960
Unrealized commodity derivative losses (gains) for changes in fair value		(29,431	)		(26,544	)

Commodity derivative losses (gains), net	$	(2,~~437~~095	)	$	(1312,~~523~~905	)

Realized commodity derivative gains or losses represent the difference between the strike prices in the contracts settled during the period and the ultimate ~~benchmark~~ settlement prices. ~~The~~ The realized commodity derivative ~~losses~~gains in the first ~~nine~~quarter ~~months~~ of ~~2013~~2014 and ~~2014~~2015 reflect the settlement of contracts at ~~benchmark~~ prices ~~above~~below the relevant strike prices. In addition, in the first nine months of 2013, we unwound all then-outstanding natural gas derivative contracts for $3.8 million as a result of the Sacramento Basin asset sale, and unwound all of our oil basis swaps for $5.7 million, realizing total losses of $9.5 million. Unrealized commodity derivative (gains) losses represent the change in the fair value of our open derivative contracts from period to period. Derivative premiums are amortized over the term of the underlying derivative contracts.

Income Tax Expense (Benefit). Due to our valuation allowance, there was no income tax expense (benefit) recorded for the ~~nine~~quarters ~~month periods~~ ended ~~September~~March 3031, ~~2014~~2015 or ~~2013~~2014. As long as we continue to conclude that we have a need for a full valuation allowance against our net deferred tax assets, we likely will not have any income tax ~~expense~~ expense or benefit other than for federal alternative minimum tax expense or for state income taxes.

Net Income (Loss). For Venoco, net ~~income~~loss for the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 was $4011.38 million compared to the net income of $349.16 million ~~for~~ for the same period in ~~2013~~2014. For DPC, ~~the~~ net ~~income~~loss for the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 was $1321.64 million compared to the net ~~loss~~income of $0.29 million for the same period in ~~2013~~2014. The changes ~~between~~ between periods are the result of the items discussed above ~~and the loss on extinguishment of debt recognized in the third quarter of 2013~~.

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Liquidity and Capital Resources

Venoco's primary sources of liquidity are cash generated from our operations and ~~amounts~~proceeds ~~available~~from ~~under~~debt ~~its~~transactions. ~~revolving~~In ~~credit~~addition, ~~facility~~Venoco has commodity derivative positions with a net asset value of $76.1 million as of March 31, 2015. If unwound, these positions could provide an additional source of liquidity subject to the commodity price environment at the relevant time. Venoco unwound one position on April 2, 2015, which hedged 1,715 barrels per day of our 2016 oil production, receiving proceeds of $15.6 million. DPC's primary sources of liquidity are distributions from Venoco and the issuance of debt securities.

Cash Flows

	Venoco, Inc.						Denver Parent Corporation
	Nine Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,						Three Months Ended March 31,
	2013			2014			2013			2014
	2014			2015			2014			2015
	(in thousands)
Cash (used in) provided by operating activities	$	614,~~864~~287		$	34(10,~~620~~662	)	$	57(11,~~638~~524	)	$	14(10,~~712~~730	)
Cash (used in) provided by investing activities		19(26,~~389~~375	)		(762,~~386~~863	)		19(26,~~389~~375	)		(762,~~386~~863	)
Cash (used in) provided by financing activities		~~(135~~38,~~055~~082	)		555,~~724~~991			~~(114~~41,~~105~~983	)		595,~~504~~991

Net cash ~~provided~~used by operating activities for Venoco was $3410.67 million in the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 compared to net cash provided by operating activities of $614.93 million in the 2014 ~~2013~~ period. Cash flows ~~provided~~used byin operating activities in the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 as compared to cash flows provided by operating activities in the first ~~nine months~~quarter of ~~2013~~2014 were ~~unfavorably~~ impacted by the lower ~~production,~~oil prices ~~partly~~and ~~offset by~~ lower ~~interest~~oil ~~expense~~ and ~~general~~natural ~~and~~gas ~~administrative costs~~production.

Net cash ~~provided~~used byin operating activities for DPC was $1410.~~7million~~7 million in the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 compared to $5711.65 million used in the ~~2013~~2014 period. The difference in the ~~amounts~~ amounts between Venoco and DPC relates to additional DPC interest expense.

Net cash used in investing activities for Venoco and DPC was $762.49 million in the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 compared to net cash provided by investing activities of $1926.4 million in the ~~2013~~2014 period. The primary investing activities in the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 were $764.5 million in capital expenditures on oil properties related to our capital expenditure program., ~~The~~partially ~~primary~~offset ~~investing~~by ~~activities~~a in$1.8 million ~~the~~final ~~first~~settlement ~~nine~~from ~~months~~the sale of ~~2013~~Montalvo ~~were~~and ~~sales~~certain ~~proceeds~~other ofassets. ~~$100 million~~The ~~received~~primary asinvesting aactivities ~~result~~in of the ~~Sacramento~~first ~~Basin~~quarter ~~asset~~of ~~sale,~~2014 ~~partially~~were ~~offset by~~ $7926.2 million in capital expenditures on oil properties related to our capital expenditure program.

Net cash provided by financing activities for Venoco was $556.70 million in the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 compared to net cash ~~used~~provided inby financing activities of $~~135~~38.1 million during the ~~2013~~2014 period. The primary financing activities in the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 were net borrowings of $606.4 million on the revolving credit facility ~~and a dividend paid to DPC of $3~~.~~9 million.~~ The primary financing activities in the first ~~nine~~quarter ~~months~~ of ~~2013~~2014 were ~~(i) repayment~~net ofborrowings ~~$315 million on our second lien term loan with a combination~~ of ~~Sacramento Basin asset sale proceeds of~~ $~~208~~42.0 million ~~and borrowings~~ on ~~our~~the revolving credit facility ofand ~~$107 million~~a ~~and~~dividend ~~(ii) net~~paid ~~additional~~to ~~borrowings~~DPC of $763.9 million ~~on our revolving credit facility~~.

Net cash provided by financing activities for DPC was $~~59.~~5.9 million in the first ~~nine~~quarter ~~months~~ of ~~2014~~2015 compared to net cash ~~used~~provided inby financing activities of $~~114~~42.10 million during the ~~2013~~2014 period.

Capital Resources and Requirements

WeOur ~~plan~~2015 tocapital ~~make~~expenditure ~~substantial~~budget ~~capital~~is ~~expenditures~~$18 million. inThis ~~the~~amount ~~future~~is ~~for~~substantially ~~the~~less ~~acquisition,~~than ~~exploration,~~it ~~exploitation~~has ~~and~~been ~~development~~in ofpast ~~oil~~ years and ~~natural~~is reflective ~~gas~~of ~~properties.~~current ~~Our~~market ~~2014~~and ~~exploration,~~economic ~~exploitation~~conditions. ~~and~~We ~~development~~expect our 2015 capital expenditures ~~budget~~to isbe ~~currently~~devoted ~~$88 million.~~primarily ~~We expect~~ to ~~fund~~operational ~~these~~improvements, ~~expenditures~~regulatory, ~~with~~health, ~~cash~~safety ~~flow~~and ~~from~~environmental ~~operations~~compliance and ~~borrowings~~progressing ~~under~~other ~~our~~long ~~revolving~~lead-time ~~credit facility~~projects. WeThe ~~have~~aggregate ~~not~~levels ~~yet~~of ~~established a~~ capital expenditures ~~budget~~in ~~for~~ 2015, ~~but~~and ~~expect~~the ~~that~~allocation itof ~~will~~those beexpenditures, ~~substantially~~are ~~less~~dependent ~~than~~on ~~the~~a variety of factors,

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~~2014~~including ~~budget~~changes ~~due~~in tocommodity ~~significant~~prices, ~~recent~~permitting ~~decreases~~matters, in the ~~price~~availability of ~~oil~~capital ~~and~~resources ~~constraints~~to onfund ~~our~~the ~~liquidity.~~expenditures Weand ~~will~~changes ~~continue~~in toour ~~pursue~~business ~~deleveraging~~assessments ~~transactions,~~as ~~which~~to ~~may~~where ~~include~~our ~~debt~~capital ~~refinancings~~can orbe most ~~restructurings,~~profitably ~~asset~~employed. ~~sales~~Accordingly, ~~joint~~the ~~ventures~~actual orlevels ~~other~~of ~~transactions. Uncertainties relating to our~~ capital ~~resources~~expenditures and ~~requirements include~~ the ~~possibility~~allocation ~~that one or more~~ of ~~the~~those ~~counterparties~~expenditures ~~to our hedging arrangements~~ may ~~fail~~vary tomaterially ~~perform under the contracts, the effects of changes in commodity prices and differentials, results~~ from our ~~drilling~~estimates. ~~and~~Our other ~~development~~principal ~~activities,~~anticipated ~~and~~uses ~~the~~of ~~possibility~~cash ~~that~~are weongoing ~~will~~operating ~~pursue~~expenses ~~one~~and orinterest ~~more~~payments ~~significant~~on ~~acquisitions~~our ~~that would require additional debt or equity financing~~indebtedness. ~~In addition~~Historically, aswe ~~discussed~~have ~~below~~used ~~under~~funds ~~"Revolving~~from ~~Credit~~operations ~~Facility", Venoco has experienced events of actual~~ and ~~potential~~borrowings ~~non-compliance~~under ~~with~~our ~~financial covenants in its~~ revolving credit facility ~~and~~as ~~such~~our ~~non-compliance~~primary sources ~~could result in, among other things, the termination~~ of ~~the~~ ~~lenders'~~liquidity. ~~commitment~~We toproject ~~make~~that ~~further~~cash ~~loans.~~flow ~~Our~~from ~~ability~~operations toand ~~obtain~~cash ~~any~~on ~~necessary~~hand ~~amendments~~resulting orfrom ~~waivers~~our ofrecent ~~the~~financing ~~revolving~~transactions ~~credit~~will ~~agreement,~~be orsufficient to ~~refinance~~fund ~~the~~our ~~facility,~~planned iscapital ~~uncertain~~expenditures and ~~depends on~~ ~~many~~ongoing ~~factors~~operations ~~outside~~for ~~of our control which may adversely affect our liquidity~~2015.

InWe ~~addition,~~are ~~Venoco~~currently ispursuing ~~subject~~a tonumber ~~various~~of ~~legal~~actions ~~and contractual limitations on its ability~~ to ~~pay~~improve ~~dividends~~our orbalance ~~otherwise~~sheet ~~make~~including ~~distributions~~minimizing toour ~~DPC,~~capital ~~and~~expenditures ~~DPC~~by ~~will~~suspending bedrilling ~~able~~operations tofor ~~pay~~2015, ~~interest~~effectively managing onour ~~its~~working ~~12.25%~~capital /and ~~13.00%~~improving ~~senior~~our ~~PIK toggle notes in~~ cash ~~only~~flows ~~if it receives cash dividends or distributions~~ from ~~Venoco~~operations. ~~The~~We ~~principal~~cannot ~~contractual~~assure ~~limits~~you onthat ~~Venoco's~~these ~~ability~~initiatives towill ~~pay~~be ~~dividends~~successful. orUncertainties ~~make distributions~~relating to ~~DPC~~our ~~are~~capital ~~the~~resources ~~covenants regarding restricted payments in the indenture governing Venoco's 8.875% senior notes~~ and ~~the agreement governing its revolving credit facility. As of~~requirements ~~September 30,~~include ~~2014,~~the ~~Venoco~~possibility ~~would~~that ~~have~~one ~~been~~or ~~permitted~~more ~~to pay aggregate cash dividends to DPC~~ of ~~approximately $184 million under~~ the ~~indenture~~counterparties ~~governing~~to ~~the~~our ~~8.875%~~hedging ~~senior~~arrangements ~~notes~~may ~~without violating~~fail ~~the restricted payment covenant in the indenture. This amount is only an estimate and the actual amount payable by Venoco from time~~ to ~~time~~perform ~~pursuant~~under to the ~~indenture~~ contracts, ~~if any, may be substantially different. Under~~ the ~~current~~effects ~~terms~~ of ~~the~~changes ~~revolving credit agreement, Venoco is permitted to pay dividends~~ in certain circumstances up to a maximum amount of $35 million in a four-quarter period on a rolling basis. The amount of dividends permitted under Venoco's debt agreements will vary over time, in part due to factors such as our operating performance, commodity prices and ~~general economic factors~~differentials, ~~many of which are outside of our control,~~ and ~~they~~ ~~may vary further as a result of amendments to~~ the ~~agreements~~possibility ~~that we enter into or the terms~~ of ~~new~~an ~~agreements.~~unexpected ~~The~~interruption ~~February 2015 interest payment on DPC's notes will be made 100%~~ in ~~kind, and we expect to continue making interest payments 100% in kind for the foreseeable future~~production.

~~The~~In ~~following~~addition, Venoco is asubject ~~summary~~to ofvarious ~~the~~legal ~~terms~~and ofcontractual ~~our~~limitations ~~significant~~on ~~debt~~its ~~agreements,~~ability ~~consisting~~to ofpay ~~Venoco's~~dividends ~~revolving~~or ~~credit~~otherwise ~~facility,~~make ~~Venoco's~~distributions ~~8.875%~~to ~~senior~~DPC, ~~notes~~ and DPC's will be able to pay interest on its 12.25% / 13.00% senior PIK toggle notes. ~~Venoco~~in ~~entered~~cash ~~into~~only anif ~~amendment~~it toreceives ~~its~~cash ~~revolving~~dividends ~~credit~~or ~~facility~~distributions infrom ~~October~~Venoco. ~~2014~~The ~~pursuant~~agreements permit Venoco to ~~which,~~pay ~~among~~dividends ~~other~~to ~~things,~~DPC ~~several~~in ofcertain circumstances. ~~the~~We ~~financial~~do ~~covenants~~not inexpect ~~the~~these ~~agreement were~~criteria ~~changed~~to be met in 2015. The ~~following~~February ~~summary~~2015 ofinterest ~~the~~payment ~~revolving~~on ~~credit~~DPC's ~~facility~~notes ~~reflects~~was ~~its~~made ~~terms~~100% asin ~~amended~~kind, ~~through~~and ~~the~~we ~~date~~expect ofto ~~this~~continue ~~report~~making interest payments 100% in kind for the foreseeable future.

~~Revolving~~The following ~~Credit~~is ~~Facility. In~~a ~~October~~summary ~~2012,~~of ~~Venoco~~the ~~entered~~terms ~~into~~of aour ~~fifth~~significant ~~amended~~debt ~~and~~agreements ~~restated~~as ~~credit~~of ~~agreement governing its revolving credit facility~~March 31,2015 and ~~has~~as ~~entered~~of ~~into several subsequent amendments to~~ the ~~agreement. The facility has a maturity~~ date of ~~March 31,~~this ~~2016~~report. ~~The~~As ~~agreement~~discussed ~~contains~~in ~~customary~~"—Recent ~~representations~~Events, ~~warranties,~~" ~~events~~Venoco ofentered ~~default,~~into ~~indemnities~~financing ~~and~~transactions ~~covenants,~~in ~~including~~April ~~covenants~~2015 ~~that~~pursuant ~~restrict Venoco's ability~~ to ~~incur~~which ~~indebtedness and require~~ it to(i) issued ~~maintain~~the ~~specified~~first ~~ratios~~lien ofsecured ~~current~~notes ~~assets to current liabilities~~ and ~~interest~~the ~~coverage.~~second ~~The~~lien ~~minimum~~secured ~~ratio~~notes, ~~of current assets to current liabilities~~ (~~as those terms are defined in the agreement~~ii) entered isinto ~~1.00 to 1.00 and~~ the ~~minimum~~term ~~interest coverage ratio (as~~loan ~~defined~~facility, ~~in the agreement~~(iii) repaid isall ~~1.30~~amounts tooutstanding ~~1.00.~~under ~~The~~its ~~agreement~~revolving ~~also~~credit ~~requires~~facility ~~that~~and ~~Venoco's~~terminated ~~ratio~~the offacility ~~secured~~and ~~debt~~ (~~as defined~~iv) repurchased to$194 million ~~EBITDA~~aggregate ~~not~~principal ~~exceed~~amount ~~2.25 to 1.00 as~~ of ~~September 30~~, ~~2014 or 1.25 to~~and ~~1.00~~accrued ~~thereafter.~~interest ~~The agreement requires us to reduce amounts outstanding under the facility with the proceeds of certain transactions or events~~on, ~~including~~its ~~sales~~8.875% ofsenior ~~assets,~~notes indue ~~certain~~2019.

44 Revolving Credit Facility ($71.4 million outstanding as of March 31, 2015; terminated as of the date of this report). In October 2012, Venoco entered into a fifth amended and restated credit agreement governing its revolving credit facility, and entered into several subsequent amendments to the agreement. The facility had a maturity date of March 31, 2016. The agreement contained customary representations, warranties, events of default, indemnities and covenants, including covenants that restricted Venoco's ability to incur indebtedness and required it to meet specified financial tests. As of March 31, 2015, all covenants under the facility were satisfied or waived.

Loans under the revolving credit facility designated as "Base Rate Loans" bore interest at a floating rate equal to (i) the greater of (x) the administrative agent's announced base rate, (y) the federal funds rate plus 0.50% and (z) the one-month LIBOR plus 1.0%, plus (ii) an applicable margin ranging from 1.25% to 2.00%, based upon utilization. Loans designated as "LIBO Rate Loans" under the revolving credit facility bore interest at (i) LIBOR plus (ii) an applicable margin ranging from 2.25% to 3.00%, based upon utilization. The applicable margin for both Base Rate Loans and LIBO Rate Loans was increased by 0.50% when Venoco's debt to EBITDA ratio exceeded 3.75 to 1.00 on the last day of each of the two fiscal quarters most recently ended. A commitment fee of 0.50% per annum was payable with respect to unused borrowing availability under the facility. The revolving credit facility was secured by a first priority lien on substantially all of Venoco's assets.

The revolving credit facility had a total capacity of $500.0 million, but was limited by the lesser of commitments from participating lenders and the borrowing base, both of which were $88.5 million as of

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~~circumstances.~~March 31, 2015. The ~~revolving~~borrowing ~~credit~~base was subject to redetermination twice each year, was subject to redetermination at other times at our request or at the request of the lenders. Lending commitments under the facility iswere ~~secured~~allocated byat various percentages to a ~~first~~syndicate ~~priority~~of ~~lien~~eleven onbanks. ~~substantially~~As ~~all~~of March 31, 2015, we had approximately $71.4million outstanding under the facility at an average interest rate of ~~our~~3.9% ~~assets~~and $13.5 million in available borrowing capacity, net of the outstanding balance and $3.6 million of outstanding letters of credit.

~~The revolving~~Venoco ~~credit~~8.875% ~~facility~~Senior ~~generally~~Notes ~~permits~~($500 million ~~Venoco~~outstanding as of March 31, ~~subject~~2015; to$308 million ~~certain~~outstanding ~~conditions~~as of the date of this report). In February 2011, toVenoco ~~pay~~issued ~~cash~~$500 million ~~dividends~~in to8.875% ~~DPC~~senior upunsecured tonotes adue ~~maximum~~in ~~amount~~February 2019 at par. Concurrently with the sale of the 8.875% senior notes, Venoco repaid in full the outstanding principal balance of $35455.3 million on its second lien term loan then in aplace. ~~four~~The 8.875% senior notes pay interest semi-~~quarter~~annually ~~period~~in arrears on February 15 and August 15 of each year. Venoco may redeem the notes prior to February 15, 2015 at a ~~rolling~~"make ~~basis~~whole premium" defined in the indenture. Beginning February 15, 2015, Venoco may redeem the notes at a redemption price of 104.438% of the principal amount and declining to 100% by February 15, 2017. The 8.875% senior notes are senior unsecured obligations and contain operational covenants that, among other things, limit Venoco's ability to make investments, incur additional indebtedness or create liens on its assets.

~~Loans under~~ DPC ~~the~~12.25% ~~revolving~~/ ~~credit~~13.00% ~~facility~~Senior ~~designated~~PIK asToggle ~~"Base~~Notes ~~Rate~~($285 million ~~Loans"~~outstanding ~~bear~~as ~~interest~~of atthe adate ~~floating~~of ~~rate~~this ~~equal~~report). In toAugust ~~(i)~~2013, DPC issued $255 ~~the~~million ~~greater~~principal amount of ~~(x)~~12.25% / 13.00% senior PIK toggle notes due 2018 at 97.304% of par. Interest on the ~~administrative~~notes ~~agent's~~is payable on February 15 and ~~announced~~August 15 ~~base~~of ~~rate~~each year, ~~(y)~~commencing February 15, 2014. The initial interest payment on the ~~federal~~notes ~~funds~~was ~~rate~~required ~~plus~~to 0be paid in cash.~~50%~~ ~~and~~For each interest period thereafter (z) other than for the final ~~one-month~~interest ~~LIBOR~~period ~~plus~~ending ~~1.0%~~at the stated maturity, ~~plus~~which ~~(ii) an~~will ~~applicable~~be ~~margin~~paid ~~ranging~~in ~~from~~cash), ~~1.25%~~DPC towill, ~~2.00%~~in certain circumstances, ~~based~~be ~~upon utilization.~~permitted ~~Loans~~to ~~designated~~pay asinterest ~~"LIBO~~on ~~Rate~~the ~~Loans"~~notes ~~under~~by increasing the ~~revolving~~principal ~~credit~~amount ~~facility~~of the ~~bear~~notes ~~interest~~or atissuing ~~(i) LIBOR~~new ~~plus~~notes (iicollectively, "PIK interest") an. ~~applicable~~Cash ~~margin~~interest ~~ranging~~on ~~from~~the 2notes accrues at the rate of 12.25% toper 3annum. PIK interest on the notes accrues at the rate of 13.00%, per annum ~~based~~until ~~upon~~the ~~utilization~~next payment of cash interest. The ~~applicable~~notes ~~margin~~are ~~for~~not ~~both~~currently ~~Base~~guaranteed ~~Rate~~by ~~Loans~~any ~~and~~of ~~LIBO~~DPC's ~~Rate~~subsidiaries. ~~Loans~~DPC ~~will~~may beredeem ~~increased~~the bynotes, ~~0.50%~~in whole or in ~~the~~part, ~~event~~at ~~that~~any ~~Venoco's~~time ~~debt~~prior to ~~EBITDA~~August 15, 2015, ~~ratio~~at ~~exceeds~~a ~~3.75~~"make-whole" toredemption ~~1.00~~price ondescribed in the ~~last day~~indenture. ofDPC ~~each~~may also redeem all or any part of the ~~two~~notes ~~fiscal~~on ~~quarters~~and ~~most~~after ~~recently~~August 15, ~~ended.~~2015 Aat ~~commitment~~a ~~fee~~redemption price of 0106.50125% ~~per~~of ~~annum~~the principal isamount ~~payable~~and ~~with~~declining ~~respect~~to 100% by August 15, 2017. The notes are senior unsecured obligations and contain operational covenants that, among other things, limit our ability to ~~unused~~make investments, ~~borrowing~~incur ~~availability~~additional ~~under~~indebtedness, ~~the~~issue ~~facility~~preferred stock, pay dividends, repurchase stock, create liens or sell assets.

~~The revolving~~ First ~~credit~~lien ~~facility~~secured ~~has~~notes a(zero ~~total~~outstanding ~~capacity~~as of ~~$500.0~~March ~~million~~31, ~~but~~2015; is$175 million ~~limited~~outstanding byas of the ~~lesser~~date of ~~commitments~~this ~~from~~report). The first lien ~~participating~~secured ~~lenders~~notes bear interest at 12% per annum and mature in February 2019. The indenture governing the ~~borrowing~~first ~~base,~~lien ~~both~~secured ofnotes ~~which are~~includes ~~currently~~covenants ~~$90 million.~~customary ~~The~~for ~~borrowing~~instruments ~~base~~of isthis ~~subject~~type, including restrictions on Venoco's ability to ~~redetermination~~incur ~~twice~~additional ~~each~~indebtedness, ~~year~~create liens on its properties, pay dividends and ~~may~~make beinvestments, ~~redetermined~~in ateach ~~other~~case ~~times~~subject atto ~~our~~exceptions. ~~request~~The orcovenants atregarding the ~~request~~incurrence of ~~the~~additional ~~lenders.~~indebtedness Incontain ~~addition~~exceptions for, among other ~~asset~~things, ~~sales~~(i) up ~~will~~to ~~result~~$25 million inof aadditional ~~decrease~~secured toor ~~our~~unsecured ~~borrowing~~indebtedness ~~base.~~that ~~Lending~~may ~~commitments~~be ~~under~~issued ~~the~~or ~~facility~~incurred ~~have~~in ~~been~~connection ~~allocated~~with atcertain ~~various~~projects ~~percentages~~approved toby athe ~~syndicate~~holders of ~~eleven~~the ~~banks.~~notes, (ii) up Ato ~~failure~~$50 million of ~~any~~additional ~~members of~~second ~~the~~lien ~~syndicate~~secured notes that may be issued in exchange for Venoco's outstanding 8.875% senior notes and (iii) up to ~~fund~~$150 million ~~under~~of additional ~~the~~third ~~facility,~~lien or aunsecured ~~further~~indebtedness ~~reduction~~that may be issued or incurred in exchange for the ~~borrowing~~8.875% ~~base,~~senior ~~would~~notes ~~adversely~~due ~~affect~~2019 ~~our~~or ~~liquidity.~~to Asfund ofacquisitions. ~~November 19,~~The ~~2014,~~indenture wealso ~~had~~includes ~~approximately~~restrictions ~~$65 million~~on ~~outstanding~~capital ~~under~~expenditures ~~the~~and ~~facility~~an atoperational ancovenant ~~average~~pursuant ~~interest~~to ~~rate~~which Venoco is generally required to maintain a specified level of 3production for each quarterly period until maturity.7% ~~and~~Other ~~$20 million~~covenants are ingenerally ~~available~~similar ~~borrowing~~to ~~capacity,~~those ~~net~~contained ofin the ~~outstanding~~indenture ~~balance~~governing ~~and~~the $3existing 8.~~6 million~~875% senior notes. Venoco's obligations under the first lien secured notes are guaranteed by all of ~~outstanding~~its ~~letters~~subsidiaries ofother ~~credit~~than Ellwood Pipeline, Inc. and are secured by a first priority

As a result of the additional debt incurred in connection with the going private transaction and the associated financial covenants, our debt-related risks have increased. These include risks that we may default on our obligations under our debt agreements, that our ability to replace reserves and maintain production may be adversely affected by capital constraints and the financial covenants under our debt agreements and that we may be more vulnerable to adverse changes in commodity prices, operational risks and economic conditions. As disclosed in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, at the time that report was filed, we projected that Venoco would be out of compliance with the debt to EBITDA ratio covenant in the revolving credit facility as of September 30, 2014. Because this non-compliance would have allowed the revolving credit facility lenders to accelerate the indebtedness under the facility, and that acceleration would have then allowed the holders of both Venoco's and DPC's senior notes to accelerate the indebtedness represented by those notes, the consolidated balance sheet of Venoco included in that report reflected all of the amounts outstanding under the revolving credit facility and the Venoco 8.875% senior notes as current liabilities as of June 30, 2014. For the same reasons, the balance sheet of DPC included in that report reflected that indebtedness, plus the DPC 12.25% / 13.00% senior PIK toggle notes, as current liabilities as of June 30, 2014. In October 2014, Venoco entered into an amendment to the revolving credit agreement that, among other things, eliminated the debt to EBITDA covenant and waived related non-compliance with the current assets to current ratio covenant, with such waivers being effective upon the sale of Venoco's West Montalvo properties, which occurred on October 29, 2014. 39

In recent weeks, oil prices have declined significantly. Due primarily to those declines, we currently project that Venoco will be out of compliance with the secured debt to EBITDA covenant in its revolving credit facility as of September 30, 2015. For the reasons discussed above with respect to the previously anticipated September 30, 2014 breach of the debt to EBITDA covenant, the indebtedness under the credit facility and Venoco's and DPC's senior notes are reflected as current liabilities as of September 30, 2014 in the applicable balance sheets included in this report. In addition, due to the

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~~resulting~~lien ~~increase~~on insubstantially ~~Venoco's~~all ~~current liabilities as~~ of ~~September 30, 2014, Venoco would have been out of compliance with~~ the ~~current~~ assets ~~to current liabilities ratio covenant as~~ of ~~that date~~Venoco ~~had~~and ~~that~~the ~~breach~~guarantors ~~not~~other ~~been~~than ~~waived~~the ~~pursuant~~cash tocollateral under the ~~October 15,~~term ~~2014~~loan ~~amendment~~facility. ~~The~~Venoco ~~amendment~~may ~~did~~redeem ~~not~~the ~~waive~~first ~~any~~lien ~~prospective~~secured ~~breaches~~notes ofat ~~that~~a ~~covenant,~~redemption ~~and, because we expect to continue to~~price ~~classify~~of ~~Venoco's~~109% ~~credit~~of ~~facility~~the ~~and~~principal ~~senior~~amount ~~notes~~beginning ~~indebtedness~~on ~~as current as of December~~January 311, ~~2014~~2016, we106% ~~expect such a breach to occur as~~ of ~~that date. In~~ the ~~event~~principal ~~that~~amount webeginning ~~are~~on ~~unable to obtain an amendment or waiver of the revolving credit facility to address that breach~~January 1, ~~and other actual or potential future breaches that may occur~~2017, ~~our creditors could elect to declare some or all of our debt to be immediately due~~ and ~~payable~~declining ~~and the lenders under the revolving credit facility could elect~~ to ~~terminate~~100% ~~their~~by ~~commitments~~January 1, ~~and cease making further loans~~2018.

~~Because we~~ Second ~~must~~lien ~~dedicate~~secured anotes ~~substantial~~(zero ~~portion~~outstanding as of ~~our~~March 31, ~~cash~~2015; ~~flow~~$150 million ~~from~~outstanding ~~operations~~as toof the ~~payment~~date of ~~amounts~~this ~~due~~report). The ~~under our debt agreements, that portion of our cash flow is not available~~second ~~for~~lien ~~other~~secured ~~purposes.~~notes ~~Our~~bear ~~ability to make scheduled~~ interest ~~payments~~at on8.875% ~~our~~if ~~indebtedness,~~paid ~~maintain compliance with the covenants~~ in ~~our~~cash ~~debt~~or ~~agreements~~12% ~~and~~if ~~pursue~~paid ~~our~~in ~~capital~~kind. ~~expenditure~~Interest ~~plan~~may ~~will depend~~be topaid ain ~~significant~~cash ~~extent~~or onin ~~our financial and operating performance~~kind, ~~which~~at isVenoco's ~~subject to prevailing economic conditions~~option, ~~commodity~~for ~~prices~~semiannual ~~and~~interest aperiods ~~variety~~commencing ~~of other factors. If our cash flow and~~within ~~other~~24 months ~~capital~~following ~~resources are insufficient to fund our debt service obligations and our capital expenditure budget while also allowing us to maintain compliance with our debt agreements~~issuance, webut may ~~be forced~~become topayable ~~reduce~~entirely orin ~~delay~~cash ~~scheduled~~earlier ~~capital~~upon ~~projects,~~the ~~sell~~occurrence ~~material~~of ~~assets~~certain orevents. ~~operations,~~The ~~seek~~second tolien ~~restructure~~secured ~~our~~notes ~~indebtedness,~~mature ~~and/or~~in ~~seek~~February ~~additional capital~~2019. ~~Needed~~The ~~capital may not be available on~~indenture ~~acceptable~~governing ~~terms or at all. Our ability to raise funds through~~ the ~~incurrence~~second oflien ~~additional~~secured ~~indebtedness~~notes ~~and~~includes ~~certain other means is limited by~~ covenants ~~in our debt agreements. In addition~~, ~~pursuant to~~and ~~mandatory~~exceptions ~~prepayment provisions in our debt agreements~~thereto, ~~our~~substantially ~~ability~~similar to ~~respond~~those toset aforth ~~shortfall~~ in ~~our expected liquidity by selling assets or incurring additional indebtedness would be limited by provisions in~~ the ~~agreements~~indenture ~~that~~governing ~~require us to use some or all of~~ the ~~proceeds~~first oflien ~~such~~secured ~~transactions~~notes. toVenoco's obligations ~~reduce amounts outstanding~~ under the ~~agreements~~notes ~~in some circumstances. If we~~ are ~~unable~~guaranteed ~~to obtain~~by ~~funds~~Venoco's ~~when~~subsidiaries ~~needed and on acceptable terms, we may not be able to complete acquisitions~~ that ~~may~~guarantee ~~be favorable to us, meet our debt obligations or finance~~ the ~~capital~~first ~~expenditures~~lien ~~necessary~~secured ~~to replace~~notes ~~our~~and ~~reserves.~~are ~~The~~secured ~~additional~~by ~~indebtedness~~a wesecond ~~incurred~~priority inlien ~~connection~~on ~~with~~ the ~~going~~same ~~private~~assets ~~transaction~~securing ~~has~~its ~~increased the debt-related risks we face, including the risks that we may default on our~~ obligations under ~~our~~the ~~debt~~first ~~agreements,~~lien ~~that~~secured ~~our~~notes. ~~ability~~Venoco ~~to replace our reserves and maintain our production~~ may beredeem ~~adversely~~the ~~affected~~second bylien ~~capital~~secured ~~constraints~~notes ~~and~~on the ~~financial~~same ~~covenants~~terms ~~under~~as ~~our debt~~the ~~agreements~~existing ~~and~~8.875% ~~that~~senior ~~we may be more vulnerable to adverse changes in commodity prices and other economic conditions~~notes.

Term loan facility (zero outstanding as of March 31, 2015; $75 million outstanding as of the date of this report). The term loan facility, which was fully drawn at closing, matures in October 2015. Amounts borrowed under the facility will bear interest at 4.0% per annum for the first thirty days and at 12% thereafter. The facility contains representations, warranties and covenants typical for instruments of this type. Venoco's obligations under the term loan facility are secured by a first priority lien on cash collateral, which collateral may be released upon the occurrence of certain events. We expect to refinance this facility prior to its maturity with a substantially similar, but longer-term, instrument.

Because we must dedicate a substantial portion of our cash flow from operations to the payment of amounts due under our debt agreements, that portion of our cash flow is not available for other purposes. Our ability to make scheduled interest payments on our indebtedness, maintain compliance with the covenants in our debt agreements and pursue our capital expenditure plan will depend to a significant extent on our financial and operating performance, which is subject to prevailing economic conditions, commodity prices and a variety of other factors. If our cash flow and other capital resources are insufficient to fund our debt service obligations and our capital expenditure budget while also allowing us to maintain compliance with our debt agreements, we may be forced to reduce or delay scheduled capital projects, sell material assets or operations, seek to restructure our indebtedness, and/or seek additional capital. Needed capital may not be available on acceptable terms or at all. Our ability to raise funds through the incurrence of additional indebtedness and certain other means is limited by covenants in our debt agreements. In addition, pursuant to mandatory prepayment provisions in our debt agreements, our ability to respond to a shortfall in our expected liquidity by selling assets or incurring additional indebtedness would be limited by provisions in the agreements that require us to use some or all of the proceeds of such transactions to reduce amounts outstanding under the agreements in some circumstances. If we are unable to obtain funds when needed and on acceptable terms, we may not be able to complete acquisitions that may be favorable to us, meet our debt obligations or finance the capital expenditures necessary to replace our reserves.

The additional indebtedness we incurred in connection with the going private transaction and, more recently significant decreases in the price of oil, have increased the debt-related risks we face, including the risks that we may default on our obligations under our debt agreements, that our ability to replace our reserves and maintain our production may be adversely affected by capital constraints and the financial covenants under our debt agreements and that we may be more vulnerable to further adverse changes in commodity prices and other economic conditions. Prior to the termination of Venoco's revolving credit facility, we were required to obtain numerous amendments to and waivers from the lenders under the facility as a result of anticipated or actual breaches of the covenants in the

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facility. We may be forced to seek similar amendments or waivers from current or future lenders, and there is no assurance that we will be able to obtain them in a timely manner or at all. We are currently exploring additional deleveraging efforts and have significantly curtailed our planned capital expenditures for 2015 relative to prior years. There can be no assurance that our deleveraging efforts will be successful.

Off-Balance Sheet Arrangements

At ~~September~~March 3031, ~~2014~~2015, we had no existing off-balance sheet arrangements, as defined under SEC rules, that have or are ~~reasonably~~ reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Adjusted Consolidated Net Tangible Assets

As of ~~September~~March 3031, ~~2014~~2015, DPC's "Adjusted Consolidated Net Tangible Assets," as that term is defined in the indenture governing ~~its~~ its 12.25% / 13.00% senior PIK toggle notes, was $10.176 billion.

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

This section provides information about derivative financial instruments we use to manage commodity price volatility. Due to the historical volatility of crude oil and natural gas prices, we have implemented a hedging strategy aimed at reducing the variability in cash flows resulting from changes in commodity prices. Currently, we purchase puts and enter into other derivative transactions such as collars and fixed price swaps in order to hedge our exposure to changes in commodity prices. All contracts are settled with cash and do not require the delivery of a physical quantity to satisfy settlement. While this hedging strategy may result in us having lower ~~revenues~~cash flows than we would have if we were unhedged in times of higher oil and natural gas prices, management believes that reducing volatility associated with commodity prices is beneficial. We may, from time to time, opportunistically restructure existing derivative contracts or enter into new transactions to effectively modify the terms of current contracts in order to improve the pricing parameters in existing contracts or realize the current value of our existing positions. We may use the proceeds from such transactions to secure additional contracts for periods in which we believe there is additional unmitigated commodity price risk or for other corporate purposes.

This section also provides information about our interest rate risk. See "—Interest Rate Risk."

Commodity Derivative Transactions

Commodity Derivative Agreements. As of ~~September~~March 3031, ~~2014~~2015, we had entered into various swap, collar and option agreements related to to our oil ~~and~~ and natural gas production. The aggregate economic effects of those agreements are summarized below. Location and quality differentials attributable to our properties are not included in the following prices. The agreements provide for monthly settlement based on the ~~difference~~differential between the ~~fixed~~agreement price ~~established~~and in the ~~agreement~~price ~~and~~per athe ~~benchmark~~applicable ~~price~~index, ~~typically either~~ Inter-Continental Exchange Brent ("Brent") ~~or NYMEX WTI for~~ (oil ~~or Henry Hub for natural gas~~).

	Oil (Brent)				~~Natural Gas (Henry Hub)~~
	Barrels/day		Weighted Avg. Prices per Bbl		~~MMBtu/day~~		~~Weighted Avg. Prices per MMBtu~~
July 1 - December 31, 2014:
January 1 - December 31, 2015:
Swaps		~~1,500~~460	$	~~107~~100.0040
Collars		4,~~100~~135	$	90.00/$98100.5900		~~2,000~~	$	~~4.35/$5.01~~
Puts		575	$	90.00
January 1 - December 31, 2016:
January 1 - December 31, 2015:
Swap		1,715	$	96.00
Swaps		460	$	100.40
Collars		1,715	$	90.00/$101.75
Collars		4,135	$	90.00/$100.00
Puts				—
January 1 - December 31, 2016:
Swap		1,715	$	96.00
Collars		1,715	$	90.00/$101.75

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Portfolio of Derivative Transactions

Our portfolio of commodity derivative transactions as of ~~September~~March 3031, ~~2014~~2015 is summarized below:

Oil

Type of Contract	Counterparty	Basis		Strike Price ($/Bbl)		Term
Collar	Key Bank	Brent	225	$	90.00/$97.00	Jan 1, 14 - Dec 31, 14
Collar	Key Bank	Brent	200	$	90.00/$93.75	Jan 1, 14 - Dec 31, 14
Put	Citibank N.A.	Brent	575	$	90.00	Jan 1, 14 - Dec 31, 14
Swap	Bank of America	Brent	1,000	$	106.00	Jan 1, 14 - Dec 31, 14
Swap	Bank of Nova Scotia	Brent	500	$	109.00	Jan 1, 14 - Dec 31, 14
Collar	Credit Suisse	Brent	1,000	$	90.00/$98.00	Jan 1, 14 - Dec 31, 15
Collar	Bank of America	Brent	1,000	$	90.00/$101.25	Jan 1, 14 - Dec 31, 15
Collar	Bank of Nova Scotia	Brent	1,675	$	90.00/$98.15	Jan 1, 14 - Dec 31, 15
Collar	Bank of Nova Scotia	Brent	460	$	90.00/$108.40	Jan 1, 15 - Dec 31, 15
Swap	Bank of America	Brent	460	$	100.40	Jan 1, 15 - Dec 31, 15
Collar	ABN AMRO Bank	Brent	1,715	$	90.00/$101.75	Jan 1, 16 - Dec 31, 16
Swap	Bank of Nova Scotia	Brent	1,715	$	96.00	Jan 1, 16 - Dec 31, 16

In April ~~Natural~~2015, ~~Gas~~ Venoco unwound one position, which hedged 1,715 barrels per day of our 2016 oil production at a price of $24.85 per Bbl, receiving proceeds of $15.6 million.

Type of Contract		Counterparty		Basis		Quantity (MMBtu/d)			Strike Price ($/MMBtu)			Term
Collar		Bank of Nova Scotia		NYMEX			2,000		$	4.35/$5.01		Mar 1 - Dec 31, 14

We enter into derivative contracts, primarily collars, swaps and option contracts, in an effort to mitigate the risk of market price fluctuations. The objective of our hedging activities and the use of derivative financial instruments are to achieve more predictable cash flows. Our hedging activities seek to mitigate our exposure to price declines and allow us more flexibility to continue to execute our capital expenditure plan even if market prices decline. Our collar and swap contracts, however, prevent us from receiving the full advantage of increases in oil or natural gas prices above the maximum fixed amount specified in the hedge agreement. We do not enter into hedge positions for amounts greater than our expected production levels; however, if actual production is less than the amount we have hedged and the price of oil or natural gas exceeds a fixed price in a hedge contract, we will be required to make payments against which there are no offsetting sales of production. This could impact our liquidity and our ability to fund future capital expenditures.

WeIn ~~enter into derivative contracts~~addition, ~~primarily~~the ~~collars,~~use ~~swaps~~of ~~and~~derivatives ~~option~~involves ~~contracts, in an effort to mitigate~~ the risk ofthat ~~market price fluctuations. The objective of our hedging activities, and~~ the ~~use~~counterparties ofto ~~derivative~~such ~~financial~~ instruments, iswill tobe ~~achieve~~unable ~~more predictable cash flows. Our hedging activities seek~~ to ~~mitigate~~meet ~~our~~the ~~exposure~~financial toterms ~~price~~of ~~declines~~such ~~and~~contracts. ~~allow~~We usgenerally ~~more~~have netting ~~flexibility~~arrangements towith ~~continue to execute~~ our ~~capital~~counterparties ~~expenditure~~that ~~plan~~provide ~~even~~for ~~if market prices decline. Our collar and swap contracts, however, prevent us from receiving~~ the ~~full~~offset ~~advantage~~ of ~~increases~~payables inagainst ~~oil or~~receivables ~~natural~~from ~~gas~~separate ~~prices above the maximum fixed amount specified in the hedge agreement. In addition, because our~~ derivative arrangements ~~are~~with ~~based~~that oncounterparty ~~index prices, they do not protect us from adverse changes~~ in the ~~difference~~event ~~between~~of ~~the~~contract ~~prices we receive for our production and the index prices~~termination. ~~We do not enter into hedge positions for amounts greater than our expected production levels; however,~~The ifderivative ~~actual~~contracts ~~production~~may isbe ~~less~~terminated ~~than~~by ~~the~~a ~~amount~~non-defaulting weparty ~~have~~in ~~hedged and~~ the ~~price~~event of ~~oil~~default orby ~~natural~~one ~~gas exceeds a fixed price in a hedge contract, we will be required to make payments against which there are no offsetting sales~~ of ~~production.~~the ~~This~~parties ~~could impact our liquidity and our ability~~ to ~~fund~~the ~~future capital expenditures. If we were unable to satisfy such a payment obligation, that default could result in a cross-default under Venoco's revolving credit~~ agreement.

In addition, the use of derivatives involves the risk that the counterparties to such instruments will be unable to meet the financial terms of such contracts. Our derivative contracts are with multiple counterparties to minimize our exposure to any individual counterparty. We generally have netting arrangements with our counterparties that provide for the offset of payables against receivables from separate derivative arrangements with that counterparty in the event of contract termination. The derivative contracts may be terminated by a non-defaulting party in the event of default by one of the parties to the agreement. All of the counterparties to our derivative contracts are also lenders, or affiliates of lenders, under Venoco's revolving credit facility. Collateral under the revolving credit facility supports our collateral obligations under our derivative contracts. Therefore, we are not required to post additional collateral when we are in a derivative liability position. Venoco's revolving

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credit facility and derivative contracts contain provisions that provide for cross defaults and acceleration of those debt and derivative instruments in certain situations.

We have elected not to apply cash flow hedge accounting to any of our derivative transactions and we therefore recognize mark-to-market gains and losses in earnings currently, rather than deferring such amounts in accumulated other comprehensive income for those commodity derivatives that would qualify as cash flow hedges.

All derivative instruments are recorded on the balance sheet at fair value. Fair value is generally determined based on the difference between the fixed contract price and the underlying market price at the determination date. Changes in the fair value of derivatives are recorded in commodity derivative (gains) losses on the consolidated statement of operations. As of ~~September~~ March 3031, ~~2014~~ 2015, the fair value of our commodity derivatives was a net ~~liability~~asset of $076.81 million.

Interest Rate Risk

We ~~are~~were previously subject to interest rate risk with respect to amounts borrowed from time to time under Venoco's revolving credit ~~facility~~ facility because those amounts bear interest at variable rates. The interest rates associated with ~~our~~the Venoco and DPC senior notes are fixed for the term of the notes. AAs ~~1.0%~~of ~~increase~~April 2, in2015 ~~interest~~we ~~rates~~no longer ~~would~~ have ~~resulted~~any ~~in additional annualized interest expense of $2.7 million on our~~ variable rate borrowings ~~of $265 million as of September 30, 2014~~.

~~See notes to our consolidated financial statements for a discussion of our long-term debt as of September 30, 2014.~~ 42

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See notes to our consolidated financial statements for a discussion of our long-term debt as of March 31, 2015.

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of Venoco's and DPC's principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~September~~March 3031, ~~2014~~2015. Based on the evaluation, those officers believe that:

•: our disclosure controls and procedures (including those of both Venoco and DPC) were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms; and
•: our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 was accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

There has not been any change in our internal control over financial reporting that occurred during the quarter ended ~~September~~March 3031, 2015 ~~2014~~ that has materially affected, or is likely to materially affect, our internal control over financial reporting. As previously disclosed, Tim Ficker and Doug Griggs, previously the Chief Financial Officer and Chief Accounting Officer, respectively, of Venoco and DPC resigned their positions in October 2014 and Scott Pinsonnault and Heather Hatfield assumed the duties of principal financial officer and principal accounting officer, respectively, of both companies in November 2014. This change in personnel is not expected to materially change either company's internal control structure except that the controls will be overseen by the new personnel.

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PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The information set forth in the financial statements included in this report is incorporated by reference herein.

Item 1A. RISK FACTORS

AsIn ~~discussed~~addition into ~~"Management's~~the ~~Discussion~~other ~~and~~information ~~Analysis~~set offorth ~~Financial~~in ~~Condition~~this ~~and Results of Operation—Liquidity and Capital Resources—Capital Resources and Requirements~~report," ~~Venoco~~you ~~has~~should ~~recently~~carefully ~~faced~~consider ~~events~~the offactors ~~actual~~discussed ~~and potential non-compliance with financial covenants~~ in ~~its~~"Risk ~~revolving~~Factors" ~~credit facility. Any future~~in ~~non-compliance, including~~ the ~~anticipated~~Venoco ~~breach~~/ ofDPC ~~the~~Annual ~~current~~Report ~~assets~~on toForm 10-K ~~current~~for ~~liabilities~~the ~~ratio~~year ~~covenant~~ended ~~as of~~ December 31, 2014 ~~if not waived~~, ~~would~~which ~~allow~~could ~~the~~materially ~~revolving~~affect ~~credit~~our ~~facility lenders~~business, tofinancial ~~cease~~condition ~~making loans under the facility~~ and/or ~~accelerate~~future ~~the then-existing indebtedness under the facility~~results. ~~Such~~The anrisks described ~~acceleration~~in ~~would~~this ~~also~~report ~~allow~~and in the ~~holders~~Annual ofReport ~~Venoco's~~on ~~and~~Form 10-K ~~DPC's~~are ~~senior~~not ~~notes to accelerate~~ the ~~indebtedness~~only ~~represented~~risks byfacing ~~those notes~~us. WeAdditional ~~may~~risks and uncertainties not becurrently ~~able~~known to ~~obtain~~us ~~any waiver~~ or ~~amendment to the revolving credit facility~~ that ~~may~~we becurrently ~~necessary~~deem into ~~the future or otherwise~~be ~~prevent~~immaterial ~~such~~also anmay ~~acceleration~~materially ofadversely affect our ~~indebtedness~~business, ~~and~~financial ifcondition ~~such an acceleration occurs, a bankruptcy, liquidation~~ and/or ~~restructuring~~operating ~~of our company could result~~results.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in "Risk Factors" in the Venoco / DPC Annual Report on Form 10-K for the year ended December 31, 2013, which could materially affect our business, financial condition and/or future results. The risks described in this report and in the Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

Item 4. MINE SAFETY DISCLOSURES

Not Applicable

Item 5. OTHER INFORMATION

Not Applicable

Item 6. EXHIBITS

Exhibit Number			Exhibit
	10.1		Sixth Amendment and Waiver to Credit Agreement, dated as of October 15, 2014, by and among Venoco, Inc., Citibank, N.A. as administrative agent, the lenders party thereto, and certain subsidiaries of Venoco, Inc. party thereto as guarantors (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Venoco, Inc. and Denver Parent Corporation, filed on October 17, 2014).
	31.1		Certification of the Chief Executive Officer of Venoco, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of the Chief Financial Officer of Venoco, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.3		Certification of the Chief Executive Officer of Denver Parent Corporation Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.4		Certification of the Chief Financial Officer of Denver Parent Corporation Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification of the Chief Executive Officer and the Chief Financial Officer of Venoco, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2		Certification of the Chief Executive Officer and the Chief Financial Officer of Denver Parent Corporation Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

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Exhibit Number			Exhibit
	10.2		Purchase and Sale Agreement, dated as of August 18, 2014, by and between Venoco, Inc. and Vintage Petroleum, LLC.
	101		The following financial information from the quarterly report on Form 10-Q of Venoco, Inc. and Denver Parent Corporation for the quarter ended March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Changes in Stockholders' Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.
	31.1		Certification of the Chief Executive Officer of Venoco, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of the Chief Financial Officer of Venoco, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.3		Certification of the Chief Executive Officer of Denver Parent Corporation Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.4		Certification of the Chief Financial Officer of Denver Parent Corporation Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification of the Chief Executive Officer and the Chief Financial Officer of Venoco, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2		Certification of the Chief Executive Officer and the Chief Financial Officer of Denver Parent Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	101		The following financial information from the quarterly report on Form 10-Q of Venoco, Inc. and Denver Parent Corporation for the quarter ended September 30, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Changes in Stockholders' Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~November~~May 1915, ~~2014~~2015


VENOCO, INC.
By:	/s/ MARK A. DEPUY
	Name:	Mark A. DePuy
	Title:	Chief Executive Officer
By:	/s/ SCOTT M. PINSONNAULT
	Name:	Scott M. Pinsonnault
	Title:	Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~November~~May 1915, ~~2014~~2015


DENVER PARENT CORPORATION
By:	/s/ TIMOTHY M. MARQUEZ
	Name:	Timothy M. Marquez
	Title:	Chief Executive Officer
By:	/s/ SCOTT M. PINSONNAULT
	Name:	Scott M. Pinsonnault
	Title:	Chief Financial Officer

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