Pogo Cuts Back While Wading Deeper Into The Gulf
Although like the rest of the industry, Houston-based Pogo
Producing Co. has been wrangling with super soft commodity prices,
the company is wading deeper into the Gulf of Mexico with a focus
on future growth.
In recent years Pogo's annual exploration budgets have been
between $230 million and $250 million. Last year's allocation was
$230 million and was set to grow to between $260 and $270 million,
said CEO Paul Van Wagenen. Instead, the company cut back
considerably. This year Pogo is planning to spend about $170
"We've refocused our attention from drilling discretionary wells
to drilling the occasional very well defined exploration play
domestically." Last month, Pogo and partners were the high bidders
on two tracts, South Marsh Island 64 and Viosca Knoll 1003. In each
Pogo has a one-third interest. "This new Viosca Knoll Block 1003
(which has a water depth of 4,800 feet) was very competitive, and
our exploration group was successful in outbidding the others by
just a few dollars," Wagenen said at the time of the sale. He told
attendees at a Texas Independent Producers and Royalty Owners
luncheon in Houston last week that Pogo expects to have some
production on stream next year in Viosca Knoll in more than 1,000
feet of water. "So we're off the Shelf and we're drilling deeper.
We're buying leases deeper all the time because that's where some
of the bigger projects are."
Since coming into existence 30 years ago, Pogo has produced 106
million barrels of oil and 1.35 Tcf of gas net to its shareholders,
Wagenen said. "We ended the year with a record 845 Bcfe of proven
reserves. At the present time we have an active ownership in 104
OCS [Outer Continental Shelf] leases, and in 27 of those we serve
as operator. We've had partnerships with all of the better
companies and best companies and many of the other companies in
this business." About nine years ago Pogo had 90 employees. That
number has grown to about 170 currently.
Joe Fisher, Houston
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