Offshore staff

(US, GoM) - Pogo says it has entered into a definitive agreement to sell 50% of all of its Gulf of Mexico oil and gas leasehold interests to Mitsui for $500 million in cash. The transaction is expected to close in June, subject to customary closing conditions.

Pogo will retain the remaining 50% interest in each of its present GoM properties, while retaining the possibility to participate, to some extent, in any significant future discovery which might be made on those offshore blocks, says the company.

Pogo says this sale is approximately equivalent to net production capacity, without any reduction due to continuing hurricane damage related curtailments of 8,000 b/d of oil and 24 MMcf/d of natural gas, and 143 bcf of net estimated proven oil and gas reserves.

"We are extremely pleased to announce the sale of half of our stake in the GoM to Mitsui, says Paul Van Wagenen, chairman and CEO of Pogo. "Today's announcement marks a milestone in enhancing investment value and minimizing risk for Pogo's shareholders. Pogo is a determined and disciplined asset buyer, and we look forward to working closely with Mitsui to realize continued growth in North America."

04/21/06