8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 31, 2006

POGO PRODUCING COMPANY

(Exact name of registrant as specified in its charter)

Delaware	1-7792	74-1659398
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

5 Greenway Plaza, Suite 2700

Houston, Texas 77046-0504

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (713) 297-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act  (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01       Completion of Acquisition or Disposition of Assets.

On May 31, 2006, Pogo Producing Company, a Delaware corporation (the “Company”) completed the sale of one-half of its federal and state Gulf of Mexico oil and gas leasehold interest and related pipelines and equipment for a purchase price of $500 million, or approximately $475 million after customary purchase price adjustments, to MitEnergy Upstream LLC, an affiliate of Mitsui & Co., Ltd., Mitsui & Co. (U.S.A.), Inc. and Mitsui Oil Exploration Co., Ltd.  The sale of the 50% interest in the Company’s Gulf of Mexico assets is equivalent to approximately 8,000 barrels per day of oil production and 24 MMcf per day of natural gas production, in each case as of March 31, 2006.

As of December 31, 2005, based on reserve reports prepared by Ryder Scott Company, L.P. and Miller and Lents, Ltd., independent petroleum engineers, the estimated reserves associated with the Gulf of Mexico properties sold to MitEnergy consisted of:

•143,365 million cubic feet equivalent (MMcfe) of total proven reserves consisting of 15,846 thousand barrels (Mbbls) of oil, condensate and natural gas liquids and 48,287 million cubic feet (MMcf) of natural gas, and

•estimated proven developed reserves consisting of 10,929 Mbbls of oil, condensate and natural gas liquids and 29,159 MMcf of natural gas.

A copy of the press release announcing the completion of this sale is furnished herewith as Exhibit 99.4.

Item 8.01       Other Events.

Notes Offering

On May 31, 2006, the Company issued a press release regarding its intention to offer, subject to market and other conditions, $400 million of senior subordinated notes in a private offering.  A copy of this press release is filed herewith as Exhibit 99.2 and incorporated herein by this reference.

Additional Information

The Company is including in this report certain information disclosed in the offering circular pertaining to the senior subordinated notes offering described above, as follows:

•In the last 15 years, the Company has drilled more than 1,000 wells in West Texas and New Mexico with a success rate of approximately 97%.

•As of December 31, 2005, based on a reserve report of Ryder Scott (a summary version of which is filed as Exhibit 99.3 to this report), the estimated reserves associated with the properties of Latigo Petroleum, Inc., which the Company acquired on May 2, 2006, were as follows:

•258 Bcfe of total proven reserves, consisting of 25,969 Mbbls of oil, condensate and natural gas liquids and 102,196 MMcf of natural gas; and

•proven developed reserves consisting of 10,916 Mbbls of oil, condensate and natural gas liquids and 69,382 MMcf of natural gas.

The Company estimates that, due to interim drilling activity, the total proven reserves associated with the acquired Latigo properties were approximately 275,000 MMcfe as of April 1, 2006.

Item 9.01       Financial Statements and Exhibits

(b)           Pro forma financial information.

The pro forma financial information with respect to the disposition of 50% of the Company’s Gulf of Mexico interests is filed as Exhibit 99.1 to this report and is incorporated herein by this reference.

(c)           Exhibits.

The exhibits listed below are filed herewith, except for Exhibit 99.4 which is furnished herewith.

23.1	Consent of Ryder Scott Company, L.P.
23.2	Consent of Miller and Lents, Ltd.
99.1	Unaudited Pro Forma Condensed Consolidated Financial Statements of Pogo Producing Company and Subsidiaries as of and for the three months ended March 31, 2006 and for the year ended December 31, 2005.
99.2	Press release dated May 31, 2006.
99.3	Summary Report of Ryder Scott, L.P. for the year ended December 31, 2005.
99.4	Press release dated May 31, 2006.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	POGO PRODUCING COMPANY
Date: May 31, 2006	By:	/s/ James P. Ulm, II
			James P. Ulm, II
			Senior Vice President and
			Chief Financial Officer

2

EX-23.1

Exhibit 23.1

CONSENT OF RYDER SCOTT COMPANY, L.P.

We hereby consent to the use of our name and the information from our reports regarding our estimates of reserves and future net revenues from the production and sale of those reserves in the Current Report on Form 8-K of Pogo Producing Company, and to the incorporation by reference thereof into Pogo Producing Company’s previously filed Registration Statement Nos. 33-54969, 333-04233, 333-72129, 333-75105, 333-75105-01, 333-75105-02, 333-74861, 333-42426, 333-42428, 333-60800, 333-67324, 333-59426, 333-65548, 333-86856, 333-98205, 333-102775, 333-126097, 333-115130, 333-86417 and 333-130557.

	/s/ Ryder Scott Company, L.P.
	RYDER SCOTT COMPANY, L.P.
Houston, Texas
May 31, 2006

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS

Miller and Lents, Ltd. hereby consents to the use of its name and the information from its reports regarding its estimates of reserves and future net revenues from the production and sale of those reserves in the Current Report on Form 8-K of Pogo Producing Company, and to the incorporation by reference thereof into Pogo Producing Company’s previously filed Registration Statement Nos. 33-54969, 333-04233, 333-72129, 333-75105, 333-75105-01, 333-75105-02, 333-74861, 333-42426, 333-42428, 333-60800, 333-67324, 333-59426, 333-65548, 333-86856, 333-98205, 333-102775, 333-126097, 333-115130, 333-86417 and 333-130557..

MILLER AND LENTS, LTD.
By:	/s/ Carl D. Richard
	Carl D. Richard
	Senior Vice President

Houston, Texas

May 31, 2006

EX-99.1

Exhibit 99.1

POGO PRODUCING COMPANY & SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated financial statements are presented to give effect to the following:

•The disposition of an undivided 50 percent interest in each and all of the Company’s federal and state Gulf of Mexico oil and gas leasehold interests and related pipelines and equipment for $500 million in cash, which closed on May 31, 2006 (“Gulf of Mexico Disposition”); and

•The pro forma results of Northrock Resources Ltd. (“Northrock”) from January 1, 2005 until September 27, 2005, the date the Company acquired Northrock.  Northrock’s results are included in the Company’s historical results for periods subsequent to September 27, 2005.

The unaudited pro forma condensed consolidated income statement for the year ended December 31, 2005 has been derived from the Company’s consolidated income statement for the year ended December 31, 2005 and from the unaudited consolidated income statement of Northrock from January 1, 2005 through the date of its acquisition on September 27, 2005.  The unaudited pro-forma condensed consolidated income statement should be read together with the Company’s consolidated income statement and the notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2005.

The unaudited pro forma condensed consolidated balance sheet as of March 31, 2006 and the unaudited pro forma condensed consolidated income statement for the three months ended March 31, 2006 have been derived from the Company’s interim consolidated financial statements (which include the results of Northrock) included in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006 and should be read in conjunction with those financial statements, including the notes thereto.

The unaudited pro forma condensed consolidated financial statements are based on the following assumptions and adjustments:

•the income statement presents the Company’s operations as if the Gulf of Mexico Disposition and the Northrock acquisition had occurred on January 1, 2005;

•the historical income statement of Northrock has been adjusted to conform to the financial statement presentation format of the Company;

•the balance sheet data presents the Company’s Gulf of Mexico Disposition as if it occurred on March 31, 2006; and

•the unaudited pro forma estimates of proved reserves and unaudited pro forma standardized measure of discounted future net cash flows related to proved oil and gas reserves give effect to the Gulf of Mexico Disposition as if it had occurred at December 31, 2005.

The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only.  The financial results may have been different if Northrock and the Company had always been combined or if Northrock and the Gulf of Mexico Disposition had occurred as of the dates indicated above.  This financial information does not purport to indicate the future results that the Company will experience.

POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Condensed Consolidated Balance Sheet

March 31, 2006

(in millions)

(Unaudited)

	Historical Consolidated			Gulf of Mexico Disposition Pro-Forma Adjustments			Pro-Forma
ASSETS
Current assets:
Cash and cash investments	$	23.7		$	471.6	(a)	$	495.3
Accounts receivable	166.1						166.1
Other receivables	26.8						26.8
Deferred tax asset	21.2						21.2
Inventories - Product	14.5						14.5
Inventories - Tubulars	21.6						21.6
Other	3.2						3.2
Total current assets	277.1			471.6			748.7
Property and equipment:	7,341.1			(654.0		)(b)	6,687.1
Less - Accumulated D D & A	1,992.0			(465.1		)(b)	1,526.9
	5,349.1			(188.9		)	5,160.2
Other	43.0						43.0
	$	5,669.2		$	282.7		$	5,951.9
LIABILITIES
Current liabilities:
Accounts payable - operating activities	$	149.1		$	—		$	149.1
Accounts payable - investing activities	138.7			—			138.7
Income taxes payable	63.2			144.1		(c)	207.3
Accrued interest payable	27.5			—			27.5
Accrued payroll and related	3.8			—			3.8
Price hedge contracts	25.7			—			25.7
Other	10.2			0.2		(d)	10.4
Total current liabilities	418.2			144.3			562.5
Long-term debt	1,577.5			—			1,577.5
Asset retirement obligation	150.3			(34.9		)(b)	115.4
Deferred income taxes	1,291.5			(33.0		)(c)	1,258.5
Price Hedge Contracts	24.5			—			24.5
Deferred credits	36.4			—			36.4
Total liabilities	3,498.4			76.4			3,574.8
SHAREHOLDERS’ EQUITY
Common stock	65.3			—			65.3
Additional capital	955.3			—			955.3
Retained earnings	1,527.3			206.3		(d)	1,727.2
				(6.4		)(e)
Accumulated other comprehensive income (loss)	(15.8		)	6.4		(e)	(9.4		)
Deferred Compensation	—			—			—
Treasury stock, at cost	(361.3		)	—			(361.3		)
Total shareholders’ equity	2,170.8			206.3			2,377.1
	$	5,669.2		$	282.7		$	5,951.9

POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Condensed Consolidated Statement of Income

Three Months Ended March 31, 2006

(in millions, except per share amounts)

(Unaudited)

	Pogo Historical Consolidated			Less: Gulf of Mexico Disposition (f)		Pro-Forma
Revenues
Oil & gas revenues	$	354.4		$	39.6	$	314.8
Other	19.1			—		19.1
Total	373.5			39.6		333.9
Expenses
Lease operating	57.1			9.0		48.1
General and administrative	28.7			—		28.7
Exploration	2.7			—		2.7
Dry hole and impairment	25.6			4.8		20.8
DD&A	110.1			7.4		102.7
Production and other taxes	13.5			0.2		13.3
Transportation and other	25.5			1.1		24.4
Total	263.2			22.5		240.7
Operating income	110.3			17.1		93.2
Interest:
Charges	(28.3		)	—		(28.3		)
Income	0.5			—		0.5
Capitalized	16.2			0.6		15.6
Commodity derivative income (expense) (e)	3.3			—		3.3
Foreign currency transaction gain	(0.2		)	—		(0.2		)
Income from before taxes	101.8			17.7		84.1
Income taxes	34.3			6.2		28.1
Net income	$	67.5		$	11.5	$	56.0
Earnings per share
Basic	$	1.18				$	0.98
Diluted	$	1.16				$	0.97
Weighted average shares:
Basic	57.3					57.3
Diluted	57.9					57.9

POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Condensed Consolidated Statement of Income

Year Ended December 31, 2005

(in millions, except per share amounts)

(Unaudited)

	Pogo Historical Consolidated			Plus: Northrock Historical from January 1, 2005 through September 26, 2005		Less: Gulf of Mexico Disposition (f)		Pro-Forma Adjustments			Pro-Forma
Revenues
Oil & gas revenues	$	1,216.3		$	305.3	$	162.7	$	—		$	1,358.9
Other	9.5			—		—		—			9.5
Total	1,225.8			305.3		162.7		—			1,368.4
Expenses
Lease operating	153.7			48.3		33.5		—			168.5
General and administrative	87.3			12.9		—		—			100.2
Exploration	26.5			10.7		1.9		—			35.3
Dry hole and impairment	87.2			10.4		29.2		—			68.4
DD&A	312.2			53.6		26.7		(53.6		)(g)	423.5
								138.0		(h)
Production and other taxes	59.5			6.2		0.8		—			64.9
Transportation and other	(9.1		)	4.7		4.9		—			(9.3		)
Total	717.3			146.8		97.0		84.4			851.5
Operating income	508.5			158.5		65.7		(84.4		)	516.9
Interest:
Charges	(68.7		)	—		—		(24.6		)(i)	(100.1		)
								(6.8		)(j)
Income	8.3			4.9		—		(4.9		)(k)	8.3
Capitalized	23.4			—		1.7		36.7		(l)	58.4
Commodity derivative income (expense) (e)	(13.6		)	—		—		—			(13.6		)
Foreign currency transaction gain	0.1			—		—		—			0.1
Income from continuing operations before taxes	458.0			163.4		67.4		(84.0		)	470.0
Income taxes	167.9			71.8		23.6		(33.6		)(m)	182.5
Net income from continuing operations	$	290.1		$	91.6	$	43.8	$	(50.4	)	$	287.5
Earnings per share
Basic	$	4.80									$	4.76
Diluted	$	4.76									$	4.72
Weighted average shares:
Basic	60.4										60.4
Diluted	60.9										60.9

POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Combined Supplemental Oil and Gas Disclosures

(Unaudited)

The following pro-forma estimated reserve quantities and estimated standardized measure of discounted future net cash flows show the effect of the disposition as if it had occurred on December 31, 2005 (dollars expressed in millions).

	Historical Consolidated		Less: Gulf of Mexico Disposition		Pro-Forma
Proved:
Oil, Condensate and Natural Gas Liquids (Bbls.)	144,040,865		15,846,401		128,194,464
Natural Gas (MMcf.)	1,177,725		48,287		1,129,438
Proved Developed:
Oil, Condensate and Natural Gas Liquids (Bbls.)	118,573,719		10,928,567		107,645,152
Natural Gas (MMcf.)	906,005		29,159		876,846
Standardized measure of discounted future net cash flows related to proved oil and gas reserves	$	4,562.8	$	530.2	$	4,032.6

POGO PRODUCING COMPANY & SUBSIDIARIES

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

a)Represents cash proceeds of $500 million from the Gulf of Mexico Disposition, less purchase price adjustments of $28.4 million arising between the effective date of January 1, 2006 and May 31, 2006.  The Company used the net cash proceeds from the Gulf of Mexico Disposition to repay a portion of the debt incurred to fund the previously announced purchase of Latigo Petroleum, Inc., which was acquired by the Company on May 2, 2006.

b)Represents adjustments to remove the carrying value of the properties to be sold and the associated accumulated amortization and asset retirement obligation as of March 31, 2006.

c)Represents the assumed current income taxes payable associated with the gain on sale and the reversal of historic deferred taxes on the properties to be sold at March 31, 2006, which were calculated using the 35% statutory U.S. federal tax rate.

d)Represents the assumed gain associated with the Gulf of Mexico Disposition, which has been calculated as follows:

Proceeds	$	500.0
Less:
Purchase price adjustments:	28.4
Carrying value of properties	188.9
Asset retirement obligation	(34.9		)
Transaction costs	0.2
Pre-tax gain	$	317.4
Income taxes @ 35%	(111.1		)
Pro-forma gain on the disposition, net of tax	$	206.3

The actual gain will depend on the book values of the disposed properties and related liabilities at the closing date.  The gain has not been reflected in the accompanying pro forma condensed consolidated income statements.

e)Represents $6.4 million of deferred losses in accumulated other comprehensive income as of March 31, 2006 that will be reclassified to earnings due to the loss of hedge accounting on certain derivative contracts designated as hedges against a portion of the Company’s Gulf of Mexico production.  This one time charge is based on the fair value of the Company’s derivative contracts as of March 31, 2006 and has not been reflected in the accompanying pro forma condensed consolidated income statements.  The actual charge will be based on the fair value of these derivative contracts subsequent to March 31, 2006 when the transaction is completed.  Subsequent to the sale, the derivative contracts associated with the Gulf of Mexico Disposition will continue to be carried on the Company’s balance sheet at fair value with changes in fair value reflected on a mark to market basis in our income statement.  For purposes of the pro forma income statement presentation, we have not reflected any mark to market adjustments associated with changes in fair value of the derivative contracts that will lose hedge accounting in conjunction with the Gulf of Mexico Disposition.

f)Represents adjustments to remove the historical revenues, operating expenses and capitalized interest associated with the properties subject to the Gulf of Mexico Disposition and the related income taxes calculated using the 35% statutory U.S. federal tax rate.

g)Represents the reversal of historical Northrock depreciation, depletion, and amortization expense.

h)Represents the pro-forma depreciation, depletion, and amortization expense based on the allocation of the Northrock purchase price to depreciable and depletable assets.

i)Represents the pro-forma interest expense and amortization of debt issuance costs on the 6.875% Senior Subordinate Notes due 2017 issued to partially fund the acquisition of Northrock.

j)Represents pro forma interest expense on the proceeds under the Company’s bank credit facility used to partially fund the acquisition of Northrock.  For purposes of the pro forma financial information, the Company has assumed an interest rate on the bank credit facility of 4.41%.  A 1/8% variance in this rate would change interest expense by $256,000 per year.

k)Represents the reversal of interest income related to a note receivable from Northrock’s former parent.  The note receivable was eliminated as part of the Northrock acquisition.

l)Represents the capitalization of interest based on the allocation of the Northrock purchase price to unproved oil and gas properties using a weighted average borrowing rate of 5.1%.

m)Represents income tax expense on the pro forma adjustments based on the applicable statutory rate (including state and provincial taxes) of 36.5% for U.S. adjustments and 39.5% for Canadian adjustments.

EX-99.2

Exhibit 99.2

FOR IMMEDIATE RELEASE

Contact: Paul G. Van Wagenen

(713) 297-5000

POGO ANNOUNCES $400 MILLION

OFFERING OF SENIOR SUBORDINATED NOTES

HOUSTON, TX – May 31, 2006 – Pogo Producing Company (NYSE: PPP) today announced it intends to offer, subject to market and other conditions, $400 million of Senior Subordinated Notes due 2013 in a private offering. Pogo intends to use net proceeds from the sale of the notes to repay senior indebtedness.

The notes to be offered have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

This announcement shall not constitute an offer to sell or the solicitation of an offer to buy the notes nor shall there be any sale of the notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

* * *

Pogo Producing Company explores for, develops and produces oil and natural gas. Headquartered in Houston, Pogo owns approximately 4,000,000 gross leasehold acres in major oil and gas provinces in North America, 3,119,000 acres in New Zealand and 1,480,000 acres in Vietnam. Pogo common stock is listed on the New York Stock Exchange under the symbol “PPP.”

Except for the historical and present factual information contained herein, the matters set forth in this release include statements of management’s current expectations as to, among other things, the offering of the notes and the use of proceeds therefrom. Statements identified by words such as “expects,” “projects,” “plans,” “believes,” “estimates,” and similar expressions are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the possibility that the anticipated benefits from Pogo’s operations cannot be fully realized, the possibility that commodity prices, costs or difficulties related to the conduct of its business will be greater or lesser than expected, and the impact of competition and other risk factors relating to our industry will be greater than expected, all as detailed from time to time in Pogo’s reports filed with the SEC. Pogo disclaims any responsibility to update these forward-looking statements.

EX-99.3

Exhibit 99.3

			FAX (713) 651-0849
1100 LOUISIANA	SUITE 3800	HOUSTON, TEXAS 77002-5218	TELEPHONE (713) 651-9191

May 23, 2006

Pogo Producing Company

Post Office Box 2504

Houston, Texas 77252-2504

Gentlemen:

At your request, we have prepared an estimate of the proved reserves, future production, and income attributable to certain leasehold and royalty interests of Latigo Petroleum, Inc. (Latigo) for Pogo Producing Company (Pogo) as of December 31, 2005. Latigo granted full approval for Ryder Scott Company to conduct this study for Pogo. The subject properties are located in the states of Arkansas, North Dakota, New Mexico, Oklahoma, Texas, and West Virginia. The income data were estimated using the Securities and Exchange Commission (SEC) requirements for future price and cost parameters.

The estimated reserves and future income amounts presented in this report are related to hydrocarbon prices. Hydrocarbon prices in effect at December 31, 2005 were used in the preparation of this report as required by SEC rules; however, actual future prices may vary significantly from December 31, 2005 prices. Therefore, volumes of reserves actually recovered and amounts of income actually received may differ significantly from the estimated quantities presented in this report. The results of this study are summarized below.

SEC PARAMETERS

POGO PRODUCING COMPANY

Estimated Net Reserve and Income Data

Certain Leasehold and Royalty Interests of

Latigo Petroleum, Inc.

As of December 31, 2005

	Proved
	Developed						Total
	Producing		Non-Producing		Undeveloped		Proved
Net Remaining Reserves
Oil/Condensate - MBbls	10,030.7		885.2		15,053.3		25,969.2
Plant Products - MBbls	0.0		0.0		0.0		0.0
Gas – MMCF	59,662		9,720		32,814		102,196
Income Data - (M$)
Future Gross Revenue	$	1,034,800.1	$	129,706.8	$	1,116,979.6	$	2,281,486.5
Deductions	314.273.0		24.513.9		487,923.9		826.710.8
Future Net Income (FNI)	$	720,527.1	$	105,192.9	$	629,055.7	$	1,454,775.7
Discounted FNI @ 10%	$	387,595.0	$	50,868.7	$	147,597.1	$	586,060.8

1200, 530 8TH AVENUE, S.W.	CALGARY, ALBERTA T2P 358	TEL (403)262-2799	FAX (403)262-2790
621 17TH STREET, SUITE 1550	DENVER, COLORADO 80293-1501	TEL(303)623-9147	FAX (303)623-4258

Liquid hydrocarbons are expressed in thousands of standard 42 gallon barrels. All gas volumes are sales gas expressed in millions of cubic feet (MMCF) at the official temperature and pressure bases of the areas in which the gas reserves are located.

The estimates of the reserves, future production, and income attributable to properties in this report were prepared using the economic software package Aries for Windows, a copyrighted program of Landmark Graphics. The program was used solely at the request of Pogo. Ryder Scott has found this program to be generally acceptable, but notes that certain summaries and calculations may vary due to rounding and may not exactly match the sum of the properties being summarized. Furthermore, one line economic summaries may vary slightly from the more detailed cash flow projections of the same properties, also due to rounding. The rounding differences are not material.

The future gross revenue is after the deduction of production taxes. The deductions comprise the normal direct costs of operating the wells, ad valorem taxes, recompletion costs, and development costs. The future net income is before the deduction of state and federal income taxes and general administrative overhead, and has not been adjusted for outstanding loans that may exist nor does it include any adjustment for cash on hand or undistributed income. No attempt was made to quantify or otherwise account for any accumulated gas production imbalances that may exist. Liquid hydrocarbon reserves account for approximately 61 percent and gas reserves account for the remaining 39 percent of total future gross revenue from proved reserves.

The discounted future net income shown above was calculated using a discount rate of 10 percent per annum compounded monthly. Future net income was discounted at four other discount rates which were also compounded monthly. These results are shown on each estimated projection of future production and income presented in a later section of this report and in summary form below.

	Discounted Future Net Income (M$ )
	As of December 31, 2005
Discount Rate	Total
Percent	Proved
8	$	670,929.6
15	$	442,177.6
20	$	352,893.2
25	$	292.535.8

The results shown above are presented for your information and should not be construed as our estimate of fair market value.

Reserves Included In This Report

The proved reserves included herein conform to the definition as set forth in the Securities and Exchange Commission’s (SEC) Regulation S-X Part 210.4-10 (a) as clarified by subsequent Commission Staff Accounting Bulletins. The definition of proved reserves is included under the tab “Petroleum Reserves Definitions” in this report.

Because of the direct relationship between volumes of proved undeveloped reserves and development plans, we include in the proved undeveloped category only reserves assigned to undeveloped locations that we have been assured will definitely be drilled, and reserves assigned to

2

the undeveloped portions of secondary or tertiary projects which we have been assured will definitely be developed.

The various reserve status categories are defined under the tab “Petroleum Reserves Definitions” in this report. The developed non-producing reserves included herein are comprised of the shut-in and behind pipe categories.

Estimates of Reserves

The reserves were estimated by performance methods, the material balance method, the volumetric method, or based on analogies to nearby producing wells. The reserve estimates by the performance method utilized extrapolations of various historical data in those cases where such data were definitive. Reserves were estimated by the volumetric method in those cases where there were inadequate historical data to establish a definitive trend or where the use of production performance data as a basis for the reserve estimates was considered to be inappropriate and the volumetric data were adequate for a reasonable estimate. The reserves included herein are comprised of primary and/or secondary reserves.

The reserves included in this report are estimates only and should not be construed as being exact quantities. They may or may not be actually recovered, and if recovered, the revenues therefrom and the actual costs related thereto could be more or less than the estimated amounts. Moreover, estimates of reserves may increase or decrease as a result of future operations.

Future Production Rates

Initial production rates are based on the current producing rates for those wells now on production. Test data and other related information were used to estimate the anticipated initial production rates for those wells or locations which are not currently producing. If no production decline trend has been established, future production rates were held constant, or adjusted for market conditions where appropriate, until a decline in ability to produce was anticipated. An estimated rate of decline was then applied to depletion of the reserves. If a decline trend has been established, this trend was used as the basis for estimating future production rates. For reserves not yet on production, sales were estimated to commence at an anticipated date furnished by Latigo and approved by Pogo.

The future production rates from wells now on production may be more or less than estimated because of changes in marketing conditions or allowables set by regulatory bodies. Wells or locations which are not currently producing may start producing earlier or later than anticipated in our estimates of their future production rates.

Hydrocarbon Prices

Latigo furnished us with hydrocarbon prices in effect at December 31, 2005, and with its forecasts of future prices which take into account SEC and Financial Accounting Standards Board (FASB) rules, current market prices, contract prices, and fixed and determinable price escalations where applicable as reviewed and accepted by Pogo.

In accordance with FASB Statement No. 69, December 31, 2005 market prices were determined using the daily oil price or daily gas sales price (“spot price”) adjusted for oilfield or gas gathering hub and wellhead price differences (e.g. grade, transportation, gravity, sulfur and BS&W) as appropriate. This price differential data was provided to us by Latgo and accepted by Pogo. Also in

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accordance with SEC and FASB specifications, changes in market prices subsequent to December 31, 2005 were not considered in this report.

For hydrocarbon products sold under contract, the contract price including fixed and determinable escalations, exclusive of inflation adjustments, was used until expiration of the contract. Upon contract expiration, the price was adjusted to the current market price for the area and held at this adjusted price to depletion of the reserves. In cases, such as new contracts, where there was no historical data to review, the future differentials were based on terms of the contract and base differentials seen in the area as provided by Latigo and accepted by Pogo.

There are no price hedging effects included in this report.

Costs

Operating costs for the leases and wells in this report were originally provided by Latigo and reviewed by Pogo. Where deemed necessary, adjustments to these costs were made by Pogo and incorporated in this report by Ryder Scott. The operating costs used include only those costs directly applicable to the leases or wells. When applicable, the operating costs include a portion of general and administrative costs allocated directly to the leases and wells under terms of operating agreements. No deduction was made for indirect costs such as indirect general administration and overhead expenses, loan repayments, interest expenses, and exploration and development prepayments that are not charged directly to the leases or wells.

Development costs were furnished to us by Pogo and are based on authorizations for expenditure for the proposed work or actual costs for similar projects. At the request of Pogo, their estimate of zero abandonment costs after salvage value for these properties was used in this report. Ryder Scott has not performed a detailed study of the abandonment costs nor the salvage value and makes no warranty for Pogo’s estimate.

Current costs were held constant throughout the life of the properties.

General

While it may reasonably be anticipated that the future prices received for the sale of production and the operating costs and other costs relating to such production may also increase or decrease from existing levels, such changes were, in accordance with rules adopted by the SEC, omitted from consideration in making this evaluation.

The estimates of reserves presented herein are based upon a detailed study of the properties in which Latigo owns an interest; however, we have not made any field examination of the properties. No consideration was given in this report to potential environmental liabilities that may exist nor were any costs included for potential liability to restore and clean up damages, if any, caused by past operating practices. Latigo has informed us that they have furnished us all of the accounts, records, geological and engineering data, and reports and other data required for this investigation. The ownership interests, costs, prices, and other factual data furnished by Latigo, reviewed and updated as necessary by Pogo, were accepted without independent verification. The estimates presented in this report are generally based on data available through December 2005.

Latigo and Pogo have assured us of their intent and ability to proceed with the development activities included in this report, and that they are not aware of any legal, regulatory or political obstacles that would significantly alter their plans.

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Neither we nor any of our employees have any interest in the subject properties and neither the employment to make this study nor the compensation is contingent on our estimates of reserves and future income for the subject properties.

This report was prepared for the exclusive use and sole benefit of Pogo Producing Company and may not be put to other use without our prior written consent for such use. The data, work papers, and maps used in this report are available for examination by authorized parties in our offices. Please contact us if we can be of further service.

	Very truly yours,
	RYDER SCOTT COMPANY, L.P.
	/s/ Brad A. Gouge
	Brad A. Gouge, P.E.
BAG
Reviewed by:
/s/ Fred W. Ziehe
Fred W. Ziehe, P.E.
Managing Senior Vice President

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EX-99.4

Exhibit 99.4

FOR IMMEDIATE RELEASE

Contact: Paul G. Van Wagenen

(713) 297-5000

POGO CLOSES SALE OF 50 PERCENT STAKE

IN ALL OF ITS GULF OF MEXICO ASSETS

                HOUSTON, TX — May 31, 2006 — Pogo Producing Company (NYSE: PPP) today announced that it has closed the previously announced sale of an undivided 50 percent interest in each of Pogo’s Gulf of Mexico oil and gas leasehold interests to Mitsui & Co., Ltd., Mitsui & Co. (U.S.A.), Inc. and Mitsui Oil Exploration Co., Ltd. (together “Mitsui”) for $500 million, subject to customary purchase price adjustments.  Proceeds from the sale have been used to reduce the outstanding indebtedness recently incurred in funding the acquisition of Latigo Petroleum, Inc. (“Latigo”), which closed on May 2, 2006.

                “We are pleased with the timely closing of the Mitsui transaction. It represents another significant step in our stated strategy to grow Pogo’s onshore North American presence,” said Paul G. Van Wagenen, Chairman and Chief Executive Officer of Pogo. “We are committed to enhancing the company’s value and believe that our strategy will also reduce our offshore risks.”

                As previously announced, on a pro forma basis, the sale of 50 percent interest in Pogo’s Gulf of Mexico assets and the nearly simultaneous acquisition of Latigo’s oil and gas assets in the Permian Basin and Texas panhandle are expected to:

•increase Pogo’s total proven oil and gas reserves by more than six percent to 2,174 billion cubic feet of natural gas equivalent;

•extend Pogo’s indicated reserves life to over 10 years;

•add over 400 development and exploration drilling locations to Pogo’s inventory; and

•complement an existing core operating area for Pogo with the addition of a significant amount of underdeveloped acreage.

                The company expects to record a pre-tax gain in the second quarter from the sale of approximately $300 million. Additionally, Pogo expects to incur a pre-tax non-cash charge of approximately $10 million to $15 million related to certain of Pogo’s current Gulf of Mexico hedges which no longer qualify for hedge accounting treatment.

* * *

Pogo Producing Company explores for, develops and produces oil and natural gas.  Headquartered in Houston, Pogo owns approximately 4,000,000 gross leasehold acres in major oil and gas provinces in North America, 3,119,000 acres in New Zealand and 1,480,000 acres in Vietnam.  Pogo common stock is listed on the New York Stock Exchange under the symbol “PPP.”

                Except for the historical and present factual information contained herein, the matters set forth in this release include statements of management’s current expectations as to, among other things, the offering of the notes and the use of proceeds therefrom. Statements identified by words such as “expects,” “projects,” “plans,” “believes,” “estimates,” and similar expressions are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the possibility that the anticipated benefits from Pogo’s operations cannot be fully realized, the possibility that commodity prices, costs or difficulties related to the conduct of its business will be greater or lesser than expected, and the impact of competition and other risk factors relating to our industry will be greater than expected, all as detailed from time to time in Pogo’s reports filed with the SEC.  Pogo disclaims any responsibility to update these forward-looking statements.