**Exhibit 10.2**

**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 andRestated 2005 Stock Incentive Plan (the “Plan”) and, in addition to the termsand conditions set forth below, is subject to the provisions of the Plan.  Unless otherwise defined herein, all termsused in this Program that are defined in the Plan shall have the meaning asdefined in the Plan.

**A.****                                   ****PURPOSES**

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

**B.****                                   ****AWARD TERMS AND CONDITIONS**

1.                                       Eligibility andParticipation.  All electedofficers and other key employees who are considered by the CompensationCommittee (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 areeligible to be designated as participants (“Participants”) and to receiveAwards under the Program.

2.                                       Awards andAward Cycles.  TheCommittee shall, from time to time and in its sole discretion, establish suchgrant cycles (the “Grant Cycles”) for the Program as it deems appropriate.  In connection with each such Grant Cycle, theCommittee shall designate those individuals or employee groups eligible toreceive Awards with respect to such Grant Cycle and the number of target sharesawarded to each such Participant (“Target Shares”).

3.                                       Vesting ofAwards.  The extent to which Awardsunder the Program are vested is determined pursuant to the below performancecriteria, based on total stockholder return (“TSR”) of the Common Stock, asdetermined in accordance with Section 3(c):

(a)                                  Measurement Periods.  With respect to each Grant Cycle, theCommittee shall prescribe one or more measurement periods for purposes ofdetermining vesting (the “Measurement Periods”).

(b)                                 TSR Peer GroupRanking.  The portion of each Award thatbecomes vested during a Measurement Period shall be determined by multiplying(i) the number of the

1

----

Participant’sTarget Shares eligible for vesting with respect to such Measurement Period by(ii) the Vesting Amount, not to exceed 100%, as set forth in a scheduleestablished by the Committee for such Grant Cycle and based on the percentileranking of the TSR of the Common Stock during such Measurement Period whencompared to the TSR during such Measurement Period of the common stock of thecorporations included in the comparative group designated by the Committee (the“Comparative Group”) in Exhibit A (attached hereto and as amended from time totime in the sole discretion of the Committee); provided, however, that if theTSR of the Common Stock ranks below the 50th percentileamong the corporations in the Comparative Group, then no Awards with respect tosuch Measurement Period shall vest.

(c)                                  Determination of TSR.  The TSR of the Common Stock and the TSR ofthe stock of each corporation included in the Comparative Group shall be equalto the appreciation of such stock assuming reinvested dividends (at thefrequency such dividends are paid) during the applicable MeasurementPeriod.  For purposes of determining theamount of a stock’s appreciation, the initial value of such stock shall beequal to the closing price of such stock on the principal exchange on whichsuch stock is traded on the last trading day prior to the commencement of theapplicable Measurement Period, and the final value shall be equal to theclosing price of such stock on such exchange on the last day of suchMeasurement Period.

4.                                       Status ofAwards Post-Vesting.

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

(b)                                 Termination of EmploymentDuring a Measurement Period.  Except as otherwise provided in an applicableemployment agreement between the Participant and the Company, if a Participant’semployment is terminated for any reason prior to the end of a MeasurementPeriod, the Award granted to that Participant with respect to such MeasurementPeriod (and other Measurement Periods within a Grant Cycle to the extent notvested) shall be forfeited and be of no further force and effect.

5.                                       Deferrals.  A Participant may elect to defer the taxationassociated with the receipt of an Award, provided such deferral isappropriately and timely communicated to the Company in a manner acceptable tothe Company and compliant with Section 409A of the Code.  Any such deferral program shall be administeredby the Committee in accordance with the rules and procedures it adopts fromtime to time, and in accordance with Section 409A of the Code.

**C.****                                ****SECTION 162(m)**

Notwithstanding any other provision of the Programto the contrary, and solely with respect to those Awards (i) made after the “materialmodification” of the Plan (within the meaning of Section 1.162-27(f)(2)(ii) ofthe Treasury Regulations) and (ii) intended to comply with Section 162(m) ofthe Code, such Awards shall be granted and administered in accordance

2

----

withthe Plan and, without limiting the generality of the foregoing, shall notexceed the limit established for long-term incentive awards pursuant to Section4(a) of the Plan.  For each Grant Cycle,the Committee shall establish the applicable performance goals from the list ofQualifying Performance Criteria (as defined in Section 7(c) of the Plan) withinthe period of time as required pursuant to Section 162(m).  No Award shall be awarded or credited, unlessotherwise determined by the Committee, until achievement of the applicableperformance goals have been certified by the Committee (except wherecertification is not required).

**D.****                                   ****MISCELLANEOUS PROVISONS**

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

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

3.                                       Section 409A ofthe Code.  ThisProgram, including any future amendments thereto which do not expressly amendthis Section, is designed, and shall be administered and operated, in the goodfaith determination of the Committee, to be exempt from Section 409A of theCode.  Although the Company intends toadminister the Program so that it is exempt from the requirements of Section409A of the Code, the Company does not warrant that any Award under the Programwill qualify for such exemption or for favorable tax treatment under any otherprovision of federal, state, local or foreign law.  The Company shall not be liable to anyParticipant for any tax, interest or penalties the Participant might owe as aresult of his or her participation in the Program.

4.                                       SavingsClause.  This Program is intended tocomply in all respects with applicable laws and regulations.  In case any one or more of the provisions ofthis Program shall be held invalid, illegal or unenforceable in any respectunder applicable law or regulation, the validity, legality and enforceabilityof the remaining provisions shall not in any way be affected or impairedthereby and the invalid, illegal or unenforceable provision shall be deemednull and void; provided, however, to the extent permissible by law, anyprovision which could be deemed null and void shall first be construed,interpreted or revised retroactively to permit this Program to be construed incompliance with all applicable laws so as to foster the intent of this Program.

3

----

**EXHIBIT A**

**Comparative Group**

Untilsuch time as changed in the sole and absolute discretion of the Committee, theComparative Group for purposes of Awards made under the Venoco, Inc. Amendedand Restated 2005 Stock Incentive Plan and pursuant to the Venoco, Inc. 2007Long-Term Incentive Program consists of the following:
|        | Berry Petroleum           |   | Plains Exploration & Production |
|--------|---------------------------|--------|-------------------------------------|
|   | Bill Barrett              |   | Quicksilver Resources               |
|   | Clayton Williams Energy   |   | Range Resources                     |
|   | Comstock Group            |   | Rosetta Resources                   |
|   | Denbury Resources         |   | St. Mary Land & Exploration     |
|   | Encore Acquisition        |   | Stone Energy                        |
|   | Harvest Natural Resources |   | Swift Energy                        |
|   | Meridian Resource         |   | Whiting Petroleum                   |

 

***   *   *  *   ***

4

----