Pogo Enters Into Agreement to Sell Northrock Resources for $2.0 Billion

May 28, 2007, 01:00 ET from Pogo Producing Company

    HOUSTON, May 28 /PRNewswire-FirstCall/ -- Pogo Producing Company (NYSE:  
 PPP) ("Pogo") today announced that its Board of Directors has approved a
 definitive agreement under which Pogo will sell all of the outstanding
 stock of its wholly-owned subsidiary, Northrock Resources Ltd.
 ("Northrock"), for $2.0 billion in cash to Abu Dhabi National Energy
 Company PJSC ("TAQA").
     The sale of Northrock Resources includes properties located largely in
 Alberta, Saskatchewan and the Northwest Territories. Northrock properties
 currently produce approximately 29,000 barrels of oil equivalent per day
 (boepd) and contain approximately 706 billion cubic feet equivalent (bcfe)
 of estimated proven reserves as of December 31, 2006. About 51% of the
 production and 55% of the Northrock reserves are oil. This sale is expected
 to close during the third quarter of 2007, subject to customary closing
 conditions and regulatory approvals.
     Paul G. Van Wagenen, Chairman and Chief Executive Officer of Pogo,
 said, "Today's announcement reflects another very significant step in our
 strategic alternatives process to unlock unrealized value from Pogo's asset
 base. We are pleased to have entered into this transaction. Combined with
 our previously announced sales of various non-core assets, mostly in the
 onshore gulf coast area, as well as Pogo's strategic exit from the waters
 of the Gulf of Mexico, today's announcement should deliver meaningful
 incremental value to Pogo's shareholders. After closing of this
 transaction, Pogo will have sold approximately 900 bcfe of proven reserves
 for about $2.6 billion."
     Peter E. Barker-Homek, chief executive officer of TAQA said, "Northrock
 Resources is a great addition to one of TAQA's core businesses -- upstream
 oil and gas producing assets. Northrock Resources comes with a
 best-in-class team of upstream professionals and well proven producing
 reserves. We look forward to working with the employees of Northrock
 Resources and continuing to grow the business." Barker-Homek further added,
 "We see the acquisition of Northrock Resources as a solid base for further
 investments and growth in Canada."
     On a pro forma basis upon closing of the sale of Northrock, and
 following the close of other announced transactions, Pogo will have a:
     -- focused onshore U.S. asset base with proven reserves of approximately
        1.3 tcfe with approximately 81% in the Western U.S. Division (includes
        720 bcfe in the Permian Basin and Texas Panhandle, 244 bcfe in the
        Rockies and 101 bcfe in the San Juan Basin) and 19% in the onshore Gulf
        Coast Division, including 180 bcfe in south Texas;
     -- reserves mix that is 65% natural gas;
     -- reserves life of 12 years; and
     -- oil and gas production of approximately 47,000 boepd.
     In addition, and as a result of these transactions, the Company expects
 to increase its profitability by:
     -- significantly reducing debt levels and related interest expense; and
     -- lowering general, administrative and operating costs.
     The Company today affirmed that it is continuing to explore other
 strategic alternatives, which could include the possible sale or merger of
 Pogo, the sale of certain additional assets, and potential changes to the
 company's business plan and its capital structure. There is no assurance
 that the exploration of strategic alternatives will result in any further
 transaction, and Pogo does not expect to make further public comment
 regarding any such transaction unless and until it enters into a definitive
 agreement or agreements. Goldman, Sachs & Co. and TD Securities Inc.
 continue to act as financial advisors to Pogo.
     Pogo Producing Company explores for, develops and produces oil and
 natural gas. Headquartered in Houston, Pogo owns approximately 5,100,000
 gross leasehold acres in major oil and gas provinces in North America,
 6,354,000 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."
     Abu Dhabi National Energy Company (TAQA) www.taqa.ae is a global energy
 company with operations in power generation, desalination, renewables,
 upstream oil/gas, pipelines, gas storage and LNG regas. TAQA was founded in
 Abu Dhabi in 2005 and listed on the Abu Dhabi Stock Exchange. TAQA has in
 excess of AED 51bn in assets, turnover of over AED 3.3bn. TAQA operates
 from its offices in Abu Dhabi, UAE; Ann Arbor, Michigan, USA, and The Hague
 with alliance partners across the Gulf, Middle East, North Africa, Europe,
 Australia, Canada, and the United States.
     This release includes statements of current expectations that
 constitute 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 cannot be fully realized. Pogo
 discusses risks and uncertainties associated with its business in reports
 it files with the Securities and Exchange Commission and disclaims any
 responsibility to update these forward- looking statements.

SOURCE Pogo Producing Company