Pogo to divest mature, non-core assets

Offshore staff

HOUSTON -- Pogo Producing Co. intends to divest certain non-strategic oil and gas properties located in the Gulf of Mexico, south and east Texas, south Louisiana, the Permian Basin and Texas panhandle, and in western Canada.

"We are constantly evaluating our assets, in order to high-grade our operations and strengthen our balance sheet," said Paul Van Wagenen, Pogo's chairman and CEO.

Based on current market valuations for comparable properties, the company would expect to ultimately realize in the range of $700 million to $800 million in proceeds from the sales of all non-core assets. Pogo expects to proceed with a phased sale process and anticipates closing the sale of the GoM, south Texas, east Texas, and south Louisiana properties by the end of the 1Q07. The second phase of this sale process, covering certain properties in the Permian Basin, the Texas panhandle, and in western Canada, should commence early in 2007 and be completed by mid-year. Proceeds from the asset sales are planned to be used for debt reduction. Pogo has retained Jefferies Randall & Dewey, a division of Jefferies & Company Inc., to assist in the initial sale process.

The properties included in the first phase of the divestment plan currently would be expected to produce, in 2007, oil and natural gas equal to approximately 37 MMcfe/d and represent more than 90 bcfe of proven reserves, plus meaningful probable and possible reserves, as well as exploratory upside potential, and would include approximately 125,000 gross leasehold acres.

10/24/06