PXP Producing (PPP) 8-K Completion of Acquisition or Disposition of Assets

EXHIBIT 99.1

POGO PRODUCING COMPANY AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On August 17, 2005, Pogo Producing Company, a Delaware corporation (the “Company”), and Pogo Overseas Production B.V., a Netherlands company and a wholly-owned subsidiary of the Company (“Pogo Overseas”), completed the sale of all of the issued and outstanding shares of Thaipo Limited, a Thailand company and a wholly-owned subsidiary of Pogo Overseas (“Thaipo”), and all of the Company’s 46.34% interest in B8/32 Partners Limited, also a Thailand company (“B8/32 Partners”) to PTTEP Offshore Investment Company Limited, a Cayman Islands company (“PTTEP Offshore”) and Mitsui Oil Exploration Co., Ltd., a Japanese company (“Mitsui”), for a total purchase price of U.S. $820 million.  The sale of the shares of Thaipo and the Company’s interests in B8/32 Partners effected the disposition of all of the Company’s Thailand operations, including its 46.34% working interest in a 608,000 gross acre concession in central portions of the Gulf of Thailand.

On June 7, 2005, the Company completed the sale of Pogo Hungary, Ltd., a Hungarian company and a wholly-owned subsidiary of the Company (“Pogo Hungary”), to Toreador Resources Corporation, a Delaware corporation, for approximately U.S. $9 million.  The sale of Pogo Hungary resulted in the disposition of the Company’s exploration license and related operations in Hungary.

The following unaudited Pro Forma Condensed Consolidated Financial Statements of the Company are presented to give effect to the Thailand and Hungary dispositions described above.  The unaudited Pro Forma Condensed Consolidated Statements of Income are presented for the six months ended June 30, 2005 and 2004 and for the years ended December 31, 2004, 2003 and 2002 and present the Company’s operations as if the Thailand and Hungary dispositions had occurred on January 1, 2002.  An unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2005 is also presented, which gives effect to the Thailand disposition as if it had occurred on June 30, 2005.  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 dispositions as if they had occurred at January 1, 2002.  The unaudited pro forma information is not necessarily indicative of the operating results that would have occurred had the dispositions been consummated at the assumed dates indicated, nor is it indicative of future operating results.

The unaudited Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with the notes hereto and the Company’s financial statements and related notes included in its Report on Form 10-Q for the quarter ended June 30, 2005 and its Report on Form 10-K for the year ended December 31, 2004 filed with the Securities and Exchange Commission.

1

POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Condensed Consolidated Balance Sheet

June 30, 2005

(In thousands)

(Unaudited)

	Historical			Pro-Forma
	Consolidated			Adjustments (b)			Pro-Forma
ASSETS
Current assets:
Cash and cash equivalents	$	242,631		$	797,084	(a)	$	1,039,715
Accounts receivable	115,120						115,120
Other receivables	17,301						17,301
Inventories - product	3,164						3,164
Inventories - tubulars	14,521						14,521
Other	2,198						2,198
Assets of discontinued operations	89,238			(89,238		)	—
Total current assets	484,173			707,846			1,192,019
Property and equipment	4,244,088						4,244,088
Less - Accumulated D D&A	1,707,987						1,707,987
	2,536,101						2,536,101
Other	17,904						17,904
Assets of discontinued operations	477,059			(477,059		)	—
	$	3,515,237		$	230,787		$	3,746,024
LIABILITIES
Current liabilities:
Accounts payable - operating activities	$	73,915		$			$	73,915
Accounts payable - investing activities	33,284						33,284
Income taxes payable	865						865
Accrued interest payable	9,387						9,387
Accrued payroll and related	3,710						3,710
Deferred income taxes	839						839
Price hedge contracts	11,503						11,503
Other	9,816						9,816
Liabilities of discontinued operations	130,922			(130,922		)	—
Total current liabilities	274,241			(130,922		)	143,319
Long-term debt	880,354						880,354
Asset retirement obligation	71,457						71,457
Deferred income taxes	524,236						524,236
Price hedge contracts	4,975						4,975
Deferred credits	20,891						20,891
Liabilities of discontinued operations	82,950			(82,950		)	—
Total liabilities	1,859,104			(213,872		)	1,645,232
SHAREHOLDERS’ EQUITY
Common stock	64,749						64,749
Additional capital	950,483						950,483
Retained earnings	883,611			444,659		(c)	1,328,270
Accumulated other comprehensive income (loss)	(10,492		)				(10,492		)
Deferred compensation	(8,833		)				(8,833		)
Treasury stock, at cost & other	(223,385		)				(223,385		)
Total shareholders’ equity	1,656,133			444,659			2,100,792
	$	3,515,237		$	230,787		$	3,746,024

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POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Condensed Consolidated Statement of Income

Six Months Ended June 30, 2005

(expressed in thousands, except per share amounts)

(Unaudited)

	Historical			Pro-Forma
	Consolidated			Adjustments (b)		Pro-Forma
Revenues:
Oil and gas	$	528,106		$	—	$	528,106
Other	13,610			—		13,610
Total	541,716			—		541,716
Operating costs and expenses:
Lease operating	62,185			—		62,185
General and administrative	37,045			—		37,045
Exploration	14,498			—		14,498
Dry hole and impairment	53,857			—		53,857
DD&A	138,381			—		138,381
Production and other taxes	25,366			—		25,366
Transportation and other	10,248			—		10,248
Total	341,580			—		341,580
Operating income	200,136			—		200,136
Interest:
Income	2,186			—		2,186
Charges	(24,061		)	—		(24,061		)
Capitalized	4,910			—		4,910
Total interest expense	(16,965		)	—		(16,965		)
Foreign currency transaction gain	2			—		2
Income before income tax	183,173			—		183,173
Income taxes	69,686			—		69,686
Income (loss) from continuing operations	$	113,487		$	—	$	113,487
Earnings per share
Basic	$	1.83				$	1.83
Diluted	$	1.82				$	1.82
Weighted average shares:
Basic	61,925					61,925
Diluted	62,489					62,489

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POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma  Condensed Consolidated Statement of Income

Six Months Ended June 30, 2004

(expressed in thousands, except per share amounts)

(Unaudited)

	Historical			Pro-Forma
	Consolidated			Adjustments (b)		Pro-Forma
Revenues:
Oil and gas	$	485,130		$	—	$	485,130
Other	700			—		700
Total	485,830			—		485,830
Operating costs and expenses:
Lease operating	46,333			—		46,333
General and administrative	29,843			—		29,843
Exploration	13,290			—		13,290
Dry hole and impairment	7,423			—		7,423
DD&A	129,209			—		129,209
Production and other taxes	17,759			—		17,759
Transportation and other	9,642			—		9,642
Total	253,499			—		253,499
Operating income	232,331			—		232,331
Interest:
Income	204			—		204
Charges	(16,071		)	—		(16,071		)
Capitalized	8,016			—		8,016
Total interest expense	(7,851		)	—		(7,851		)
Loss on extinguishment of debt	(10,893		)	—		(10,893		)
Foreign currency transaction gain	(3		)	—		(3		)
Income before income tax	213,584			—		213,584
Income taxes	79,803			—		79,803
						��
Income from continuing operations	$	133,781		$	—	$	133,781
Earnings per share
Basic	$	2.10				$	2.10
Diluted	$	2.08				$	2.08
Weighted average shares:
Basic	63,703					63,703
Diluted	64,273					64,273

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POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Condensed Consolidated Statement of Income

Year Ended December 31, 2004

(expressed in thousands, except per share amounts)

(Unaudited)

	Historical			Less: Historical
	Consolidated			Hungary			Thailand			Pro-Forma
Revenues:
Oil and gas	$	1,308,225		$	—		$	335,142		$	973,083
Other	14,754			54			95			14,605
Total	1,322,979			54			335,237			987,688
Operating costs and expenses:
Lease operating	144,473			29			43,938			100,506
General and administrative	69,775			2,763			4,956			62,056
Exploration	23,063			1,127			197			21,739
Dry hole and impairment	106,417			38,003			6,780			61,634
DD&A	365,089			66			113,147			251,876
Production and other taxes	67,984			—			23,880			44,104
Transportation and other	21,699			47			2,164			19,488
Total	798,500			42,035			195,062			561,403
Operating income (loss)	524,479			(41,981		)	140,175			426,285
Interest:
Income	2,526			6			1,998			522
Charges	(29,333		)	—			—			(29,333		)
Capitalized	14,216			—			—			14,216
Total interest expense	(12,591		)	6			1,998			(14,595		)
Loss on extinguishment of debt	(13,759		)	—			—			(13,759		)
Foreign currency transaction gain (loss)	(1,726		)	491			(2,187		)	(30		)
Income (loss) before income tax	496,403			(41,484		)	139,986			397,901
Income taxes	234,649			2,425			83,358			148,866
Income (loss) from continuing operations	$	261,754		$	(43,909	)	$	56,628		$	249,035
Earnings per share
Basic	$	4.10								$	3.90
Diluted	$	4.06								$	3.87
Weighted average shares:
Basic	63,848									63,848
Diluted	64,393									64,393

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POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Condensed Consolidated Statement of Income

Year Ended December 31, 2003

(expressed in thousands, except per share amounts)

(Unaudited)

	Historical			Less: Historical
	Consolidated			Hungary			Thailand		Pro-Forma
Revenues:
Oil and gas	$	1,159,544		$	—		$	303,470	$	856,074
Other	2,452			21			—		2,431
Total	1,161,996			21			303,470		858,505
Operating costs and expenses:
Lease operating	123,098			—			41,367		81,731
General and administrative	61,291			2,434			4,789		54,068
Exploration	7,547			4			644		6,899
Dry hole and impairment	35,102			—			4,429		30,673
DD&A	325,820			61			95,878		229,881
Production and other taxes	35,485			—			11,750		23,735
Transportation and other	25,924			97			1,935		23,892
Total	614,267			2,596			160,792		450,879
Operating income (loss)	547,729			(2,575		)	142,678		407,626
Interest:
Income	1,852			7			1,172		673
Charges	(46,360		)	—			—		(46,360		)
Capitalized	16,531			—			—		16,531
Total interest expense	(27,977		)	7			1,172		(29,156		)
Loss on extinguishment of debt	(5,893		)	—			—		(5,893		)
Foreign currency transaction gain (loss)	1,370			(63		)	1,404		29
Income (loss) before income tax	515,229			(2,631		)	145,254		372,606
Income taxes	220,122			—			82,751		137,371
Income (loss) from continuing operations	$	295,107		$	(2,631	)	$	62,503	$	235,235
Earnings per share
Basic	$	4.72							$	3.76
Diluted	$	4.60	(d)						$	3.67	(d)
Weighted average shares:
Basic	62,538								62,538
Diluted	64,612								64,612

6

POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Condensed Consolidated Statement of Income

Year Ended December 31, 2002

(expressed in thousands, except per share amounts)

(Unaudited)

	Historical			Less: Historical
	Consolidated			Hungary			Thailand		Pro-Forma
Revenues:
Oil and gas	$	750,401		$	—		$	212,684	$	537,717
Other	4,453			15			79		4,359
Total	754,854			15			212,763		542,076
Operating costs and expenses:
Lease operating	112,663			—			38,247		74,416
General and administrative	49,490			1,127			4,850		43,513
Exploration	4,783			78			544		4,161
Dry hole and impairment	26,999			—			—		26,999
DD&A	287,809			64			77,096		210,649
Production and other taxes	20,058			—			—		20,058
Transportation and other	12,879			—			—		12,879
Total	514,681			1,269			120,737		392,675
Operating income (loss)	240,173			(1,254		)	92,026		149,401
Interest:
Income	1,760			1			1,447		312
Charges	(57,450		)	—			—		(57,450		)
Capitalized	24,033			—					24,033
Total interest expense	(31,657		)	1			1,447		(33,105		)
Minority interest	(4,140		)	—			—		(4,140		)
Foreign currency transaction gain	435			61			345		29
Income (loss) before income tax	204,811			(1,192		)	93,818		112,185
Income taxes	97,780			—			54,242		43,538
Income (loss) from continuing operations	$	107,031		$	(1,192	)	$	39,576	$	68,647
Earnings per share
Basic	$	1.85							$	1.18
Diluted	$	1.77	(d)						$	1.16	(d)
Weighted average shares:
Basic	57,963								57,963
Diluted	64,321								61,595

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POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Estimates of Proved Reserves

Oil, Condensate and Natural Gas Liquids (Bbls.)

(Unaudited)

	Historical		Less: Historical
	Consolidated		Hungary		Thailand		Pro-Forma
Proved Reserves as of January 1, 2002	119,279,395		—		39,300,700		79,978,695
Revisions of previous estimates	9,563,087		—		272,570		9,290,517
Extensions, discoveries and other additions	8,460,885		—		4,495,300		3,965,585
Sale of properties	(202,785	)	—		—		(202,785	)
Estimated 2002 production	(18,921,750	)	—		(5,982,000	)	(12,939,750	)
Proved Reserves as of December 31, 2002	118,178,832		—		38,086,570		80,092,262
Revisions of previous estimates	9,964,506		—		3,625,838		6,338,668
Extensions, discoveries and other additions	6,305,471		10,444		3,312,627		2,982,400
Purchase of properties	4,301,200		—		—		4,301,200
Estimated 2003 production	(23,880,000	)	—		(7,718,000	)	(16,162,000	)
Proved Reserves as of December 31, 2003	114,870,009		10,444		37,307,035		77,552,530
Revisions of previous estimates	4,281,792		(10,444	)	(720,527	)	5,012,763
Extensions, discoveries and other additions	4,197,673		—		2,469,912		1,727,761
Purchase of properties	13,775,000		—		—		13,775,000
Sale of properties	(1,832,000	)	—		—		(1,832,000	)
Estimated 2004 production	(18,910,000	)	—		(6,540,000	)	(12,370,000	)
Proved Reserves as of December 31, 2004	116,382,474		—		32,516,420		83,866,054
Proved Developed Reserves as of:
January 1, 2002	79,777,300		—		20,394,100		59,383,200
December 31, 2002	97,873,000		—		23,831,851		74,041,149
December 31, 2003	87,269,277		—		19,878,246		67,391,031
December 31, 2004	92,574,224		—		19,606,216		72,968,008

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POGO PRODUCING COMPANY AND SUBSIDIARIES

Pro-Forma Estimates of Proved Reserves

Natural Gas (MMcf)

(Unaudited)

	Historical		Less: Historical
	Consolidated		Hungary		Thailand		Pro-Forma
Proved Reserves as of January 1, 2002	818,792		—		148,225		670,567
Revisions of previous estimates	66,796		—		28,559		38,237
Extensions, discoveries and other additions	89,774		—		11,199		78,575
Estimated 2002 production	(101,852	)	—		(28,379	)	(73,473	)
Proved Reserves as of December 31, 2002	873,510		—		159,604		713,906
Revisions of previous estimates	22,408		—		16,722		5,686
Extensions, discoveries and other additions	95,664		10,131		20,438		65,095
Purchase of properties	129,119		—		—		129,119
Estimated 2003 production	(108,378	)	—		(31,576	)	(76,802	)
Proved Reserves as of December 31, 2003	1,012,323		10,131		165,188		837,004
Revisions of previous estimates	(20,854	)	(10,131	)	5,634		(16,357	)
Extensions, discoveries and other additions	37,648		—		4,038		33,610
Purchase of properties	172,022		—		—		172,022
Sale of properties	(2,888	)	—		—		(2,888	)
Estimated 2004 production	(118,581	)			(29,171	)	(89,410	)
Proved Reserves as of December 31, 2004	1,079,670		—		145,689		933,981
Proved Developed Reserves as of:
January 1, 2002	602,345		—		69,997		532,348
December 31, 2002	687,556		—		87,301		600,255
December 31, 2003	780,774		—		77,938		702,836
December 31, 2004	852,848		—		83,095		769,753

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POGO PRODUCING COMPANY AND SUBSIDIARIES

PRO-FORMA STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
RELATED TO PROVED OIL AND GAS RESERVES—Unaudited

	Historical			Less: Historical
	Consolidated			Hungary		Thailand			Pro-Forma
	(Expressed in thousands)
	2004
Future gross revenues	$	10,574,504		$	—	$	1,724,267		$	8,850,237
Future production costs:
Lease operating expense	(2,529,480		)	—		(405,950		)	(2,123,530		)
Future development and abandonment costs	(580,701		)	—		(143,584		)	(437,117		)
Future net cash flows before income taxes	7,464,323			—		1,174,733			6,289,590
Discount at 10% per annum	(2,892,390		)	—		(242,118		)	(2,650,272		)
Discounted future net cash flows before income taxes	4,571,933			—		932,615			3,639,318
Future income taxes, net of discount at 10% per annum	(1,476,366		)	—		(395,759		)	(1,080,607		)
Standardized measure of discounted future net cash flows related to proved oil and gas reserves	$	3,095,567		$	—	$	536,856		$	2,558,711

	2003
Future gross revenues	$	8,507,228		$	49,101		$	1,545,580		$	6,912,547
Future production costs:
Lease operating expense	(1,811,584		)	(9,408		)	(385,058		)	(1,417,118		)
Future development and abandonment costs	(520,159		)	(13,950		)	(181,396		)	(324,813		)
Future net cash flows before income taxes	6,175,485			25,743			979,126			5,170,616
Discount at 10% per annum	(2,485,484		)	(9,227		)	(234,304		)	(2,241,953		)
Discounted future net cash flows before income taxes	3,690,001			16,516			744,822			2,928,663
Future income taxes, net of discount at 10% per annum	(1,239,971		)	(48		)	(320,383		)	(919,540		)
Standardized measure of discounted future net cash flows related to proved oil and gas reserves	$	2,450,030		$	16,468		$	424,439		$	2,009,123

	2002
Future gross revenues	$	7,078,353		$	—	$	1,591,899		$	5,486,454
Future production costs:
Lease operating expense	(1,819,485		)	—		(669,180		)	(1,150,305		)
Future development and abandonment costs	(406,101		)	—		(138,523		)	(267,578		)
Future net cash flows before income taxes	4,852,767			—		784,196			4,068,571
Discount at 10% per annum	(1,754,411		)	—		(181,398		)	(1,573,013		)
Discounted future net cash flows before income taxes	3,098,356			—		602,798			2,495,558
Future income taxes, net of discount at 10% per annum	(1,043,141		)	—		(262,371		)	(780,770		)
Standardized measure of discounted future net cash flows related to proved oil and gas reserves	$	2,055,215		$	—	$	340,427		$	1,714,788

10

POGO PRODUCING COMPANY AND SUBSIDIARIES

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

(Expressed in thousands)

(a)Represents cash proceeds of $820,000 less transaction expenses of $12,359 and assumed taxes on the transaction of $10,557.

(b)The Thailand and Hungary operations were reported as discontinued operations in the Company’s June 30, 2005 Form 10-Q.

(c)The gain as of June 30, 2005 on the dispositions was calculated as follows:

Proceeds	$	820,000
Less:
Transaction costs	(12,359		)
Investment in Thailand at June 30, 2005	(352,425		)
Assumed taxes on the transaction	(10,557		)
Pro-forma gain on sale of discontinued operations	$	444,659

(d)Diluted earnings per share include the effect of the Company’s convertible Notes due 2006 and its Trust Preferred Securities to the extent each has a dilutive effect.

11