Pogo Scores Three Blocks Offshore New Zealand

Pogo Producing has been awarded an exploration license on each of the three blocks it sought in New Zealand's September bidding round. The three new exploration licenses, totaling 1,014,000 acres, are identified by New Zealand authorities as blocks "E", "G" and "I" and are located in the Taranaki basin, offshore from the west coast of New Zealand's North Island. Pogo's three successful bids are included among 23 total bids that were submitted on 14 blocks in this bidding round according to New Zealand authorities. Pogo's 100%-owned licenses provide for five-year initial exploration terms, subject to extensions. Pogo's bid includes a plan to acquire at least 1,000 square kilometers of new 3-D seismic within the first two years across the three licenses. Thereafter, based on the results of that seismic analysis by Pogo's explorationists, drilling decisions will be made. Paul G. Van Wagenen, Chairman and Chief Executive Officer of Pogo, said, "We are extremely pleased to be awarded the right to explore in this new and very prospective area. We began our analysis of this particular basin several years ago. The licenses awarded today mark the culmination of that phase. Now, we are anxious to begin the exploration stage of this process."

Mr. Van Wagenen also said, "This New Zealand bid round coincides with the return of much higher prices for newly discovered New Zealand natural gas, and the continuing availability of world oil prices. Moreover, the license terms offer relatively low royalties and taxes, which are also very appealing to us. Most importantly, this acreage, in water depths generally less than 100 meters, lies within a proven basin in a country with a very favorable economic and political climate."