Pogo Producing Co. Wednesday announced plans to sell nonstrategic North American oil and natural gas properties located in the Gulf of Mexico, South and East Texas, South Louisiana, the Permian Basin, Texas Panhandle and Western Canada. The Houston-based independent expects to make $700-800 million from the sales, which would be used for debt reduction.

Pogo expects to close the sale of the Gulf, Texas and Louisiana properties in the first three months of 2007. The properties included in the first phase of the sale, which total 125,000 gross leasehold acres, currently are expected to produce oil and natural gas equal to 37 MMcfe/d in 2007, and they represent more than 90 Bcfe of proven, probable and possible reserves, Pogo said. The second phase of the sale, covering properties in the Permian Basin, Texas Panhandle and Canada, should begin in early 2007 and be completed by mid-year.

All together, Pogo owns about 4.8 million gross leasehold acres in North America. It also holds about 3 million acres in New Zealand and 1.5 million acres in Vietnam. At the end of last year, Pogo’s estimated proved net reserves were 2,042 Bcfe, which included 144 million barrels of oil and 1,178 Bcf of natural gas.

“We are constantly evaluating our assets, in order to high-grade our operations and strengthen our balance sheet,” said CEO Paul G. Van Wagenen. “Consistent with our previously stated goal of reducing risk and enhancing investment value to our shareholders, we have initiated a review of all of Pogo’s assets to determine where to deploy our resources most effectively.”

Pogo analyzed the performance of its asset base relative to targeted rates of return and determined to enhance the company’s value by selling the noncore properties, the CEO said. “We expect this sale to further concentrate Pogo’s asset base into one that is more capable of steady, predictable growth, as well as reducing unit operating costs, improving capital efficiency and increasing Pogo’s profitability.”

Pogo retained Jefferies Randall & Dewey, a division of Jefferies & Co. Inc., to assist in the initial sale process.

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