Tale of Two Small-Cap Oil Companies (VQ, DNR, CRED)

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Venoco, Incorporated (NYSE:VQ) announced this morning that it will cut its capital spending in 2009 to $150 million. As recently as last November, Venoco had planned to spend $400 million on capex in 2009.

Last July, the company withdrew a planned IPO that would haveestablished an E&P master limited partnership. Venoco is alsotrying to complete the sale of about 18.4 million barrels of oilequivalent to Denbury Resources, Inc. (NYSE:DNR). Venoco expects torealize $150 million from the sale, which the company plans to use toreduce outstanding debt.

In other energy news, CREDO Petroleum Corporation (NASDAQ:CRED) issueda pat-itself-on-the-back press release this morning. The Denver Posthas named CREDO as the top performing energy stock in Colorado for 2008.

Let’s see, CREDO stock closed at $9.87/share on January 2, 2008, and at$8.42/share on December 31, 2008. That’s a drop of about 15%. Thingsmust be tougher than we thought in Colorado.

Paul Ausick
January 12, 2009