Pogo Announces Gulf of Mexico Discovery

Pogo Producing Company announced that its Main Pass Block 61 No. 5 exploratory well has been drilled to a total vertical depth of 7,972 feet, and discovered some 158 feet of net oil pay. The well was drilled by jackup, Pride California. Well analysis indicated unusually high porosity and permeability, a large areally extended feature and a thick pay section, indicating excellent potential for this discovery. Pogo has a 100 percent working interest in the well and in the entire Main Pass Blocks 61/62 field.

Pogo's Chairman, President and Chief Executive Officer, Paul G. Van Wagenen, said, "We are excited about this new discovery, and about this entire field. This two-block field is beginning to look like it could develop into one of the more significant crude oil fields discovered on the shelf of the Gulf of Mexico in the last several years. Pogo has accelerated the development of this important project in order to achieve production from this field by the end of this year. We believe that this exploratory success combined with the company's ongoing development programs in South Texas, the Gulf of Mexico and the Gulf of Thailand, should enable Pogo's production to grow markedly during the next couple of years."

The Main Pass Block 61 No. 5 exploratory well announced today targeted a prospect at or near Fault Block "B" which is the second well drilled in that area. The new well delineates and expands the first quarter 2001 discovery at Fault Block "B," the Main Pass Block 61 No. 2 well, which encountered 91 feet of oil pay. Fault Block "B" is situated approximately one and one-half miles southeast of Fault Block "A."

A four-pile, twelve-slot jacket has been installed very recently on Fault Block "A," at the location of the initial Main Pass Block 61 No. 1 discovery well which was drilled in the fourth quarter of last year. Two additional successful wells in Fault Block "A" have been subsequently drilled, and two to five more Fault Block "A" area development wells are planned for later this year. An oil production facility with a maximum capacity of 20,000 barrels per day will be installed in November 2001 and will serve as the production platform for the Fault Block "A" area. First production from this Main Pass Blocks 61/62 field is expected to occur by year-end 2001.

As a result of the successful drilling described in this announcement, three or four more Fault Block "B" area wells will be drilled and an additional platform will be needed in the vicinity of Fault Block "B" in order to fully develop this field. In addition, several similar but yet untested prospects have been identified on this two-block complex and will be the focus of future exploratory drilling.