QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.6

VENOCO, INC.
2007 LONG-TERM INCENTIVE PROGRAM

        This Venoco, Inc. 2007 Long-Term Incentive Program (the "Program") is
established pursuant to the Venoco, Inc. Amended and Restated 2005 Stock
Incentive Plan (the "Plan") and, in addition to the terms and conditions set
forth below, is subject to the provisions of the Plan. Unless otherwise defined
herein, all terms used in this Program that are defined in the Plan shall have
the meaning as defined in the Plan.

A.    PURPOSES

        The Program is designed to enable eligible executives of Venoco, Inc.
(the "Company") to share in the future success of the Company's business by
providing them an opportunity to earn shares of the Company's common stock
("Common Stock"), through the award of stock grants ("Awards") contingent upon
achieving certain performance measures. Since the executives eligible to receive
Awards under the Program are those in positions to make significant and direct
contributions to the success of the Company, the Program is intended,
accordingly, to promote a closer identity of interests between eligible
employees and stockholders.

B.    AWARD TERMS AND CONDITIONS

        1.    Eligibility and Participation.    All elected officers and other
key employees who are considered by the Compensation Committee (the "Committee")
of the Board of Directors of the Company (the "Board") to be likely to have a
significant impact on the business of the Company are eligible to be designated
as participants ("Participants") and to receive Awards under the Program.

        2.    Awards and Award Cycles.    The Committee shall, from time to time
and in its sole discretion, establish such grant cycles (the "Grant Cycles") for
the Program as it deems appropriate. In connection with each such Grant Cycle,
the Committee shall designate those individuals or employee groups eligible to
receive Awards with respect to such Grant Cycle and the number of target shares
awarded to each such Participant ("Target Shares").

        3.    Vesting of Awards.    The extent to which Awards under the Program
are vested is determined pursuant to the below performance criteria, based on
total stockholder return ("TSR") of the Common Stock, as determined in
accordance with Section 3(c):

        (a)    Measurement Periods.    With respect to each Grant Cycle, the
Committee shall prescribe one or more measurement periods for purposes of
determining vesting (the "Measurement Periods").

        (b)    TSR Peer Group Ranking.    The portion of each Award that becomes
vested during a Measurement Period shall be determined by multiplying (i) the
number of the Participant's Target Shares eligible for vesting with respect to
such Measurement Period by (ii) the Vesting Amount, not to exceed 100%, as set
forth in a schedule established by the Committee for such Grant Cycle and based
on the percentile ranking of the TSR of the Common Stock during such Measurement
Period when compared to the TSR during such Measurement Period of the common
stock of the corporations included in the comparative group designated by the
Committee (the "Comparative Group") in Exhibit A (attached hereto and as amended
from time to time in the sole discretion of the Committee); provided, however,
that if the TSR of the Common Stock ranks below the 50th percentile among the
corporations in the Comparative Group, then no Awards with respect to such
Measurement Period shall vest; provided further however, that if in any
Measurement Period the TSR of the Common Stock ranks below the 50th percentile
but the TSR of the Common Stock

1

--------------------------------------------------------------------------------

exceeds the TSR of the S&P Oil & Gas Exploration & Production Select Industry
Index (the "Index"), then the Vesting Amount for that Measurement Period shall
be 75%.

        (c)    Determination of TSR.    The TSR of the Common Stock and the TSR
of the stock of each corporation included in the Comparative Group and the Index
shall be equal to the appreciation of such stock assuming reinvested dividends
(at the frequency such dividends are paid) during the applicable Measurement
Period. For purposes of determining the amount of a stock's or Index's
appreciation, the initial value of such stock or Index shall be equal to the
closing price of such stock or Index on the principal exchange on which such
stock or Index is traded on the last trading day prior to the commencement of
the applicable Measurement Period, and the final value shall be equal to the
closing price of such stock on Index on such exchange on the last day of such
Measurement Period.

        4.    Status of Awards Post-Vesting.    

        (a)    Lapse of Risk of Forfeiture.    The Participant's Award is
subject to a risk of forfeiture until such time the Committee determines that a
Participant's Award has vested pursuant to Section 3 above and the vesting
conditions, if any, pursuant to the Notice of Stock Award and Stock Award
Agreement have been satisfied. Upon vesting, restrictions on transferability
shall lapse and the shares shall be released from escrow.

        (b)    Termination of Employment During a Measurement Period.    Except
as otherwise provided in an applicable employment agreement between the
Participant and the Company, if a Participant's employment is terminated for any
reason prior to the end of a Measurement Period, the Award granted to that
Participant with respect to such Measurement Period (and other Measurement
Periods within a Grant Cycle to the extent not vested) shall be forfeited and be
of no further force and effect.

        5.    Deferrals.    A Participant may elect to defer the taxation
associated with the receipt of an Award, provided such deferral is appropriately
and timely communicated to the Company in a manner acceptable to the Company and
compliant with Section 409A of the Code. Any such deferral program shall be
administered by the Committee in accordance with the rules and procedures it
adopts from time to time, and in accordance with Section 409A of the Code.

C.    SECTION 162(m)

        Notwithstanding any other provision of the Program to the contrary, and
solely with respect to those Awards (i) made after the "material modification"
of the Plan (within the meaning of Section 1.162-27(f)(2)(ii) of the Treasury
Regulations) and (ii) intended to comply with Section 162(m) of the Code, such
Awards shall be granted and administered in accordance with the Plan and,
without limiting the generality of the foregoing, shall not exceed the limit
established for long-term incentive awards pursuant to Section 4(a) of the Plan.
For each Grant Cycle, the Committee shall establish the applicable performance
goals from the list of Qualifying Performance Criteria (as defined in
Section 7(c) of the Plan) within the period of time as required pursuant to
Section 162(m). No Award shall be awarded or credited, unless otherwise
determined by the Committee, until achievement of the applicable performance
goals have been certified by the Committee (except where certification is not
required).

D.    MISCELLANEOUS PROVISONS

        1.    Other Terms.    The Committee shall determine the remaining terms
and conditions of the Awards awarded under the Program.

        2.    Amendment, Suspension or Termination of the Program.    The
Committee may at any time amend, suspend or terminate the Program without the
approval of the Company's stockholders.

2

--------------------------------------------------------------------------------

        3.    Section 409A of the Code.    This Program, including any future
amendments thereto which do not expressly amend this Section, is designed, and
shall be administered and operated, in the good faith determination of the
Committee, to be exempt from Section 409A of the Code. Although the Company
intends to administer the Program so that it is exempt from the requirements of
Section 409A of the Code, the Company does not warrant that any Award under the
Program will qualify for such exemption or for favorable tax treatment under any
other provision of federal, state, local or foreign law. The Company shall not
be liable to any Participant for any tax, interest or penalties the Participant
might owe as a result of his or her participation in the Program.

        4.    Savings Clause.    This Program is intended to comply in all
respects with applicable laws and regulations. In case any one or more of the
provisions of this Program shall be held invalid, illegal or unenforceable in
any respect under applicable law or regulation, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and the invalid, illegal or unenforceable provision shall be
deemed null and void; provided, however, to the extent permissible by law, any
provision which could be deemed null and void shall first be construed,
interpreted or revised retroactively to permit this Program to be construed in
compliance with all applicable laws so as to foster the intent of this Program.

3

--------------------------------------------------------------------------------

EXHIBIT A

Comparative Group

        Until such time as changed in the sole and absolute discretion of the
Committee, the Comparative Group for purposes of Awards made under the
Venoco, Inc. Amended and Restated 2005 Stock Incentive Plan and pursuant to the
2007 Long-Term Incentive Program consists of the following:

Clayton Williams
Berry Petroleum
Comstock Resources Inc.
Denbury Resources
Plains Exploration
Rosetta Resources
St Mary Land & Exploration
Stone Energy
Swift Energy
Whiting Petroleum
Breitburn Energy Partners LP
Cimarex Energy
Crimson Exploration
Continental Resources
Linn Energy, LLC

* * * * *

4

--------------------------------------------------------------------------------

QuickLinks

Exhibit 10.6

VENOCO, INC. 2007 LONG-TERM INCENTIVE PROGRAM

EXHIBIT A

Comparative Group