Venoco, Inc. has entered into a contract to sell crude oil from its South Ellwood field to Tesoro. Tesoro recently completed the acquisition of Shell's Los Angeles refinery and Wilmington terminal where Venoco has delivered South Ellwood crude for nearly ten years.

The initial one-year contract provides for deliveries primarily into the Los Angeles delivery point, but will allow for access to Tesoro's San Francisco Bay area facilities as well as via a Long Beach pipeline system to which Venoco recently acquired access.

The contract price reflects a discount to NYMEX that is slightly greater than the historical discount, but better than the recent spot market. The potential use of a backup barge will also be provided for under the agreement in the event the current barge is unavailable. The backup barge will have to receive local air permits and be vetted by Tesoro prior to providing any transportation services.

"We are very pleased to have this contract in place and to know the South Ellwood crude not only has a fixed delivery point, but also a fixed price off NYMEX," said Tim Marquez, Venoco's Chief Executive Officer and Chairman. "Also, once the backup barge is permitted and approved, we expect that it will have real value for us."