Pogo acquires West Texas properties for $208M

Ray Tyson

Exploration and production independent Pogo Producing has gone to West Texas for a third property acquisition in three months, agreeing to buy about 90 billion cubic feet of gas equivalent reserves from an undisclosed private seller for $208 million in cash and assumed debt.

Fast-growing independent Pogo, which quadrupled production and more than doubled its reserve base over the last five years, tacked on $189 million worth of San Juan basin natural gas properties in late August. The deals provided Pogo with about 100 billion cubic feet of gas equivalent reserves.

Pogo’s latest acquisition will come with daily production of 16.5 million cubic feet of gas equivalent and more than 50,000 leasehold acres, the company said, adding that it plans to drill more than 100 wells on the property during 2005.

Paul Van Wagenen, Pogo’s chief executive officer, said Nov. 11 that the company believes the properties contain about 100 billion cubic feet of additional probable reserves.

“Thus, we hope to more than double the current daily production rate from these properties by the end of 2005,” he added. “The acquisition features repeatable low-risk development drilling, many recompletion opportunities and significant exploratory drilling potential.”

The $208 million acquisition, which includes $35 million of assumed debt, will be paid for with available cash and bank debt. The sale is expected to close around Dec. 21.