Pogo Drills Significant New Discovery in Gulf of Mexico.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--May 25, 2001

Pogo Producing Company (NYSE:PPP) today 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. 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 today's 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.

Pogo Producing Company explores for, develops and produces oil and natural gas. Headquartered in Houston, Pogo owns various ownership interests in 110 federal and state Gulf of Mexico lease blocks offshore from Louisiana and Texas. Pogo also owns approximately 414,000 gross leasehold acres in various oil and gas provinces onshore in the United States, approximately 714,000 gross acres in the Gulf of Thailand, approximately 778,000 gross acres in Hungary, approximately 113,000 gross acres in the United Kingdom North Sea, approximately 81,000 gross acres in the Denmark North Sea, and approximately 99,000 gross acres in Canada. Pogo common stock is listed on the New York Stock Exchange and Pacific 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 efficiencies, cost savings, market profile and financial strength, and the competitive ability and position of the company. 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 the industry will be greater than expected, all as detailed from time to time in Pogo's reports filed with the Securities and Exchange Commission. Pogo disclaims any responsibility to update these forward-looking statements.