**Exhibit10.1**

**VENOCO, INC.**

**AMENDED AND RESTATED 2005STOCK INCENTIVE PLAN**

**Amendment No. 1**

THIS AMENDMENT No. 1 to theVenoco, Inc. Amended and Restated 2005 Stock Incentive Plan (the ”Plan”)is dated March 27, 2007 to amend the Plan in the following respects.

**WHEREAS,**the Compensation Committee(the “Committee”) of the Company’s Board of Directors has the authority toamend the Plan pursuant to Sections 3 and 12 of the Plan;

**WHEREAS,**the Committee desires toamend the Plan to increase the number of shares of Company common stock subjectto the Plan from 1,700,000 shares to 3,486,388 shares; and

**WHEREAS,**the Committee desires tomake certain other amendments deemed necessary or advisable to maintaincompliance with applicable laws, rules and regulations.

**NOW THEREFORE,**the Committee hereby amendsthe Plan in the following respects:

1.                                       Definition ofCovered Employee.  Effectiveas of the date written above, the following Section 2(j) is deleted in itsentirety and replaced with the following:

“**(j)****                             *****“Covered Employee”*** means those personsdesignated as “covered employees” under Section 162(m) of the Code.”

2.                                       Definition ofIndependent Director.  Effectiveas of the date written above, the provision “. . . or Nasdaq rules andregulations . . . “ in Section 2(r) shall be deleted each place it appears.

3.                                       Stock Subjectto the Plan.  Effectiveupon the approval of the Company’s stockholders, Section 4(a) of the Plan isdeleted in its entirety and replaced with the following:

“**(a)****                           ****Share Reserve.**  Subject tothe provisions of Section 11 relating to adjustments upon changes in CommonStock, the Common Stock that may be issued pursuant to Incentive Stock Optionsand other Stock Awards shall not exceed a maximum aggregate of 3,486,338 sharesof Common Stock.  Stock appreciationrights provided for in Section 7(b) hereof that are payable only in cash willnot reduce the number of shares of Common Stock available for Stock Awardsgranted under the Plan.  Subject to theprovisions of Section 11 relating to adjustments upon changes in Common Stock,the maximum aggregate number of shares of Common Stock for which Stock Awardsmay be issued to any Participant under the Plan during any calendar year shallnot exceed 570,000 shares of Common Stock. The limitation set forth in the preceding sentence

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shallbe construed in accordance with Treasury Regulations issued under Section162(m) of the Code.”

4.                                       QualifyingCompensation as “Performance-Based Compensation” under Section 162(m) of theInternal Revenue Code. Effective upon approval of the Company’s stockholders, Section 7(c) isadded to the Plan as follows:

“**(c)****                           ****Performance-Based Compensation under Section 162(m).**  Notwithstanding anything herein to thecontrary other than the share reserve limitation of subsection 4(a) of thePlan, the performance criteria for any Stock Award that is intended to satisfythe requirements for “performance-based compensation” under Section 162(m) ofthe Code shall be established by the Committee based on one or more QualifyingPerformance Criteria selected by the Committee and specified in writing.

**(i)****                                   ****Qualifying Performance Criteria.**  For purposes of this Plan, the term “QualifyingPerformance Criteria” shall mean any one or more of the following performancecriteria, applied to either the Company as a whole or to a business unit,Affiliate, related corporation, or business segment, and measured eitherannually or cumulatively over a period of years, on an absolute basis orrelative to a pre-established target, to previous years’ results or to adesignated comparison group, in each case as specified in the Stock Award bythe Committee: (a) implementation of a strategic plan, (b) stock price, (c)earnings per share, (d) total stockholder return, (e) operating margin,(f) stock price as a multiple of cash flow, (g) return on equity,(h) return on assets, (i) return on investment, (j) operating income,(k) net operating income, (l) pre-tax income, (m) cash flow, (n) revenue, (o)expenses, (p) earnings before interest, taxes and depreciation, (q) economicvalue added, (r) reserve additions, (s) finding and development costs, (t)drilling and work-over budget, (u) increases in average daily production, (v)return on capital invested, (w) corporate overhead costs, (x) interestcoverage ratio, (y) consolidated leverage ratio, (z) ratio of PV 10 reserves todebt, (aa) environmental and safety programs, (bb) stockholders’ equity,and (cc) corporate acquisitions.

**(ii)****                               ****Certification.**  Beforepayment of any compensation under a Stock Award intended to qualify as “performance-basedcompensation” under Section 162(m) of the Code, the Committee shall certify theextent to which any Qualifying Performance Criteria and any other materialterms under such Stock Award have been satisfied (other than in cases wheresuch relate solely to stock price).

**(iii)****                           ****Discretionary Adjustments Pursuant to Section 162(m).**  Notwithstanding satisfaction or completion ofany Qualifying Performance Criteria, to the extent specified at the time ofgrant of a Stock Award to Covered Employees, the number of Shares or otherbenefits granted, issued, retained, or vested under a Stock Award on account ofsatisfaction of such Qualifying Performance Criteria may be reduced by theCommittee on the basis of such further considerations as the Committee in itssole discretion shall determine.”

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5.                                       Considerationfor Restricted Stock Awards.  Effective as of the date written above,Section 7(a)(i) is deleted in its entirety and replaced with the following:

“**(i)****                             ****Consideration.**  A restrictedStock Award may be awarded for any lawful consideration permitted under thelaws of the Company’s state of incorporation.”

6.                                       Termination ofParticipant’s Continuous Service.  Effective as of the date written above,Section 7(a)(iii) is deleted in its entirety and replaced with the following:

“**(iii)****                     ****Termination of Participant’s Continuous Service.**  Unless otherwise provided in the restrictedStock Award Agreement, in the event a Participant’s Continuous Serviceterminates prior to a vesting date set forth in the restricted Stock AwardAgreement, any unvested restricted Stock Award shall be forfeited andautomatically transferred to and reacquired by the Company at no cost to theCompany, and neither the Participant nor his or her heirs, executors,administrators or successors shall have any right or interest in the restrictedStock Award.”

7.                                       StockholderRights.  Effective upon the approval ofthe Company’s stockholders, Section 10(e)(ii) is deleted in its entirety andreplaced with the following:

“**(ii)****                         ****Restricted Stock.** Unless otherwise provided in and upon the terms and conditions in theStock Award Agreement governing an award of restricted stock, a Participantshall have the right to receive all dividends and other distributions paid ormade respecting such restricted stock.”

8.                                       Amendment ofPlan.  Effective as of the datewritten above, the provision “. . . Nasdaq or . . . ” in Section 12(a) shall bedeleted each place it appears.

9.                                       Effect on Plan.  Except as otherwise set forth in thisAmendment No. 1, the Plan shall remain in full force and effect.

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INWITNESS WHEREOF, the Company, by its duly authorized officer, has executed thisAmendment No. 1 to the Plan effective as of the date first indicated above.
|        | **VENOCO, INC.**        |
|--------|-------------------------|
|   | a Delaware  corporation |
|   |                    |
|   |                    |
|   | By:                     | Timothy M.  Marquez |   |
|   |                    |
|   | Its:                    | Chief Executive  Officer |   |

 

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