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Pogo Producing Completes $1.7B Northrock Resources Acquisition

Pogo Producing Co. said last week it has closed on the previously announced acquisition of Northrock Resources Ltd., a wholly owned Canadian subsidiary of Unocal Corp., for approximately U.S. $1.7 billion in cash. The deal was first announced on July 11 (see NGI, July 18).

"We are pleased to announce the closing of this important acquisition, which will provide Pogo with greater proven reserves and a substantial prospective exploration acreage position," said Pogo CEO Paul G. Van Wagenen. "The Northrock acquisition is a major component of our 2005 Strategic Plan to grow our asset base in North America in order to deliver greater value to shareholders for years to come."

On a pro forma basis, the acquisition of Northrock's oil and gas assets in Canada is expected to significantly increase Pogo's operations. The company said the acquisition has increased its total proven oil and gas reserves by 42%, from 1,437 Bcfe to 2,041 Bcfe. In addition, the Northrock assets increased Pogo's worldwide net leasehold acreage by about 82%, from approximately 1.73 million net acres to approximately 3.15 million net acres.

Pogo said the acquisition has added over 900 identified drilling opportunities to its inventory and complemented the company's reserve and production mix with Northrock's assets. The deal extends Pogo's indicated reserves life to 9.3 years and it is expected to be accretive to Pogo's earnings, cash flow, production and reserves per share in 2006 and beyond.

Houston-based Pogo Producing Co. explores for, develops and produces oil and natural gas. The company owns interests in 89 federal and state Gulf of Mexico lease blocks offshore Louisiana and Texas, in addition to 3,500,000 gross leasehold acres in major oil and gas provinces in North America and 1,043,000 acres in New Zealand.

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