BP and Verenium Announce Pivotal Biofuels Agreement

(Verenium) BP to acquire Verenium's cellulosic biofuels business, including Jennings, San Diego facilities - - Verenium to receive $98.3 million and retain its commercial enzyme business including validated technology platform to apply to all business segments including biofuels

BP and Verenium Corporation July 15, 2010, announced an agreement for BP Biofuels North America to acquire Verenium's cellulosic biofuels business, including the Company's facilities in Jennings, LA and San Diego, CA for $98.3 million. Verenium will retain its commercial enzyme business, including its biofuels enzymes products and have the right to develop its own lignocellulosic enzyme program. Verenium will also retain select R&D capabilities, as well as rights to access select biofuels technology developed by BP using the technology it is acquiring from Verenium through this agreement.

"We are very pleased that our strategic development partnership with BP has successfully advanced our cellulosic ethanol technology to the cusp of commercialization," said Carlos A. Riva, President and Chief Executive Officer at Verenium. "We believe that BP is the right company to make the investment needed to carry this forward and expedite the commercialization of the technology."

"This agreement should give both companies the flexibility to pursue the growth opportunities in the respective businesses and achieve goals in the near-term. As a result of this transaction, Verenium will have the resources to grow our commercial enzyme business while maintaining strategic access to the emerging cellulosic ethanol market in a manner that better fits our resources," added Riva.

"This acquisition demonstrates BP's intent to be a leader in the cellulosic biofuels industry in the U.S. and positions us as one of the few global companies with an integrated end-to-end capability, from R&D through commercialization to distribution and blending," said Philip New, CEO of BP Biofuels. "Our partnership with Verenium has been very fruitful, enabling the companies to develop a leading cellulosic ethanol technology package, driven forward by the skills and expertise of people from both companies. By acquiring Verenium's cellulosic biofuels technologies, BP Biofuels should be well placed to accelerate the delivery of low cost, low carbon, sustainable biofuels, at scale."

-- Jennings, LA facilities, including the pilot plant and the demonstration-scale facility as well as the San Diego, CA R&D facilities;

In addition, BP would retain scientists and technologists needed to continue the biofuels development program.

-- The core commercial enzyme business, including the personnel and supporting technology required to develop the business, including for applications in the biofuels segment;

-- $10.8 million in cash (currently restricted) to be released upon assignment of its lease for the San Diego facility to BP;

-- The ability to access select biofuels products developed by BP using the technology it is acquiring from Verenium; and

-- The ability to transition out of the San Diego, CA facility over the next two years.

BP will become the sole investor in Vercipia Biofuels, a 50-50 joint venture formed by BP and Verenium in February 2009, and will independently manage all of Vercipia's activities going forward. Similarly, Galaxy Biofuels, a 50-50 joint development company owned by BP and Verenium, will be owned 100% by BP. This transaction is expected to close in the third quarter of 2010.

UBS Investment Bank acted as financial advisor to Verenium in connection with the transaction. DLA Piper LLP (US) served as legal advisor to BP. Cooley LLP served as legal advisor to Verenium. READ MORE