Venoco stock fluctuates, but gift to schools solid

Money available for scholarships above $50 million

By David Milstead, Rocky Mountain News (Contact)

Published August 16, 2008 at 12:05 a.m.

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The value of stock in Denver-based Venoco fluctuates. The value of the gift to the Denver schools by Venoco founder Timothy Marquez and his wife, Bernadette, does not.

Marquez made headlines in 2006 with a $50 million donation to be used for scholarships for Denver Public Schools students. He funded it by giving 2.5 million shares of Venoco stock.

That stock is long gone, however. The Denver Foundation, which manages the gift, sold half of the shares in Venoco's November 2006 initial public offering.

The other half was sold afterward in the open market and is now invested in the Denver Foundation's diverse portfolio, said spokesman Rebecca Arno.

The gift was intended as a "challenge grant" to obtain an equal number of dollars from the community for scholarships for Denver Public Schools graduates, said Cindy Abramson, the executive director of the nonprofit founded for that purpose: Denver Scholarship Foundation.

Abramson's group is currently raising money to match the Marquez family's gift.

"With the stock used to secure that pledge was sold and invested, the Marquez family is prepared to match in full any donation from the community for the scholarship foundation," Abramson said.

Venoco announced a sizable second-quarter net loss Aug. 7 - $172.57 million, on revenues of $168.05 million. It was not, however, cash going out the door: The company reported nearly $365 million of losses, most unrealized, on derivative contracts used to lock in the prices of oil and natural gas.

The company's operating income, which reflects its energy- production activities, nearly tripled to $90.5 million in the quarter, compared with $31.7 million in the second quarter of 2007.

Wall Street took the news in stride, with Venoco's stock dropping less than 1 percent on the news. But overall, the stock has shown volatility in less than two years as a public company.

Venoco's stock started out at $17, less than Marquez assumed when he made the donation, and has fluctuated between about $11 in March of this year and nearly $25 in June. That's meant the original 2.5 million shares, worth $42 million on IPO day, have been worth between $27 million and $59 million.

With the sale of those shares soon after the gift, though, as well as additional charitable resources from the Marquez family, the money available for scholarships now exceeds $50 million, Abramson said.

Finance Editor David Milstead can be reached at milstead@RockyMountainNews.com or 303-954-2648.

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