Although like the rest of the industry, Houston-based PogoProducing Co. has been wrangling with super soft commodity prices,the company is wading deeper into the Gulf of Mexico with a focuson future growth.

In recent years Pogo’s annual exploration budgets have beenbetween $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 backconsiderably. This year Pogo is planning to spend about $170million.

“We’ve refocused our attention from drilling discretionary wellsto drilling the occasional very well defined exploration playdomestically.” Last month, Pogo and partners were the high bidderson two tracts, South Marsh Island 64 and Viosca Knoll 1003. In eachPogo has a one-third interest. “This new Viosca Knoll Block 1003(which has a water depth of 4,800 feet) was very competitive, andour exploration group was successful in outbidding the others byjust a few dollars,” Wagenen said at the time of the sale. He toldattendees at a Texas Independent Producers and Royalty Ownersluncheon in Houston last week that Pogo expects to have someproduction on stream next year in Viosca Knoll in more than 1,000feet 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 someof the bigger projects are.”

Since coming into existence 30 years ago, Pogo has produced 106million 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 provenreserves. At the present time we have an active ownership in 104OCS [Outer Continental Shelf] leases, and in 27 of those we serveas operator. We’ve had partnerships with all of the bettercompanies and best companies and many of the other companies inthis business.” About nine years ago Pogo had 90 employees. Thatnumber has grown to about 170 currently.

Joe Fisher, Houston

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