EXHIBIT 99.1
[Pogo Logo] Pogo Producing Company
NEWS
FOR IMMEDIATE RELEASE
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Contact: Paul G. Van Wagenen
(713) 297-5000
POGO'S 2000 EARNINGS SPARKED BY 33% INCREASE IN OIL AND GAS PRODUCTION;
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RESERVES REPLACED FOR NINTH CONSECUTIVE YEAR;
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2001 CAPITAL AND EXPLORATION BUDGET SET AT $275 MILLION
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Quarterly Dividend Declared
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HOUSTON, TX. - January 23, 2001 - Net income of Pogo Producing Company
("PPP"- NYSE) in 2000 totaled $87,255,000, or $2.16 per share, on revenues of
$497,991,000, it was announced here today by Paul G. Van Wagenen, Chairman and
Chief Executive Officer of the company ("Pogo"). In 1999, Pogo recorded net
income of $22,134,000, or $0.55 per share, on revenues of $275,116,000.
Pogo's 2000 fourth quarter net income rose to $35,899,000, or $0.88 per
share, on revenues of $159,971,000, compared to a fourth quarter 1999 net income
of $8,090,000, or $0.20 per share, on revenues of $85,104,000.
Discretionary cash flow in 2000 was $316,114,000, compared to $81,790,000 a
year earlier. In the fourth quarter of 2000, discretionary cash flow was
$108,145,000, up from $36,268,000 in the fourth quarter a year ago.
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Mr. Van Wagenen said, "We are gratified that we successfully replaced our
production for the ninth consecutive year. Pogo's reserves replacement was even
more significant considering our record-high hydrocarbon production rates in
2000, an impressive 33% increase in equivalent oil and natural gas production
volumes compared to 1999. Much of the increased volumes reflect the attainment
of stabilized production from the company's excellent concession in the Gulf of
Thailand."
Mr. Van Wagenen also said, "Replacing the reserves Pogo produces each year
is a primary objective at the company. We are committed to grow our hydrocarbon
asset base and are proud to have met that objective each of the last nine
years."
RESERVES REPLACEMENT
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Pogo added enough new proven oil and natural gas reserves to replace an
estimated 177% of its 2000 company-wide production. New reserves added in
Thailand offset all of our impressive Thailand production volumes, and the new
2000 reserves discovered in North America also reflect a 226% production
replacement rate in the United States and Canada.
Pogo's 2000 daily average production of liquid hydrocarbons (crude oil,
condensate and plant products) was 27,929 barrels per day, up 54% from 18,113
barrels per day produced in 1999. Daily natural gas production in 2000 averaged
164.6 million cubic feet per day (mmcf/d), up 16% from Pogo's 1999 average of
141.6 mmcf/d. In the fourth quarter of 2000, production of liquid hydrocarbons
averaged 34,087 barrels per day, up 56% from 21,858 barrels per day produced in
the 1999 fourth quarter. Natural gas volumes averaged 160.5 mmcf/d in the
quarter just ended, down from 166.6 mmcf/d in the fourth quarter of 1999.
For all of 2000, natural gas prices averaged $3.16 per thousand cubic feet
(mcf), up from $2.15 per mcf averaged in 1999. Natural gas prices for the
fourth quarter averaged $4.36 per mcf, compared to $2.43 per mcf averaged in the
1999 fourth quarter. Average oil and
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condensate prices received by Pogo in 2000 were $28.92 per barrel, up from
$18.76 per barrel received in 1999. Fourth quarter 2000 oil and condensate
prices rose to $27.93 per barrel, from $23.07 per barrel received in the same
quarter of 1999.
THE GULF OF MEXICO
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Pogo's Offshore (Gulf of Mexico) Division was extremely active in the
quarter just ended. Two discovery and delineation wells drilled this past
quarter on our Main Pass Blocks 61/62 field resulted in a very significant
discovery, proving a crude oil pay column of up to 640 feet, spread over an 800-
acre reservoir. The field will be developed rapidly and produced soon, with
production to begin late this year. Pogo is the operator and 100% owner of the
field. A third well will be drilling in the field within one week, with more
wells to follow.
Another discovery at year-end was drilled at Ewing Banks Blocks 871/872
field, a field one-half owned by Pogo. The discovery encountered 134 feet of pay
across two objective horizons, and was tested from one interval at a daily rate
of 4,300 barrels of oil and 2.9 million cubic feet of natural gas. This field
should be on production by the fourth quarter of this year. A second well is
presently drilling.
Pogo's development of the Mississippi Canyon Blocks 661/705 field continues
at a brisk pace. Pogo is the operator and an approximately 75% owner of the
field. Significant production should begin in the fourth quarter.
THE GULF OF THAILAND
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Full, sustained production from the first three Benchamas platforms has
been achieved, stabilizing at a gross daily rate of approximately 150 mmcf/d of
natural gas and 36,000 barrels of oil per day. Pogo owns a working interest
across the entire license concession of 46.34%. Six new platforms have been
ordered and five of them are tentatively earmarked for the Benchamas field.
Gross Tantawan field production has risen due to a 12-well infill program which
is
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ongoing in the "C" and "D" platform areas in southern Tantawan. Pogo and its
partners were awarded a production license covering the northern part of
Jarmjuree, based upon significant drilling success there. One of the six new
platforms will be set at north Maliwan with first production planned for the
fourth quarter of this year. A seven to ten well exploration program focusing
principally on the Kung exploration area and the south Jarmjuree exploration
area should begin by early February.
ONSHORE AND CANADA
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Forty-two new wells were drilled in the Permian Basin last year, and 40 of
them were completed as producers. Overall, since 1990, 451 wells have been
drilled in that area, with a 96% success rate. Net production from the Permian
has now reached an all-time high of 37 mmcf/d and 6,350 barrels per day, with
another 46 gross wells presently budgeted for 2001. In the Onshore (Gulf Coast)
Division, drilling has begun on the Thibodaux 61-square mile 3-D seismic
project. Pogo is the project operator in Thibodaux, located in Lafourche
Parish, Louisiana, and six initial prospects have been identified for sequential
drilling. If those wells are successful, more wells will follow.
OTHER INTERNATIONAL PLAYS
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A new 2-D seismic program was completed on our 653,000 acre Szolnok,
Hungary license area in October. Some 888.8 kilometers of linear seismic was
generated. That seismic information has led to two different 3-D seismic
acquisition programs which began in November and are now underway. Over 30,000
acres of 3-D seismic has already been acquired with over 45,000 additional acres
of 3-D in the Tompa area to come. Pogo has also acquired 41,000 acres of new 3-D
seismic in the Kenderes sub-area of the Szolnok license area. That Szolnok 3-D
program is continuing. Pogo is very excited about this new exploration
opportunity in central Europe. The company owns 100% of the two Hungary license
areas totaling 778,000 acres.
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Pogo plans multi-well drilling programs at both the Szolnok and Tompa areas
beginning before the end of the year.
In the Denmark North Sea, the company owns a 40% interest in a very
prospective 81,000-acre block. One exploratory well is planned for that Denmark
license area during the fourth quarter of 2001.
$275 MILLION CAPITAL AND EXPLORATION BUDGET APPROVED
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The Board of Directors today approved a $275 million capital and
exploration budget for 2001. This compares to approximately $180 million
expended in 2000. In 2001, 151 gross wells are planned for the company,
including 52 in the Gulf of Thailand.
Mr. Van Wagenen said, "Pogo has an aggressive exploration and delineation
drilling schedule for 2001, with particular emphasis on its new Gulf of Mexico
prospects and the Thailand license concession. Accelerated Benchamas field
production in the Gulf of Thailand is expected over the next two years, and
domestic production will also rise markedly in 2001 and 2002."
QUARTERLY DIVIDEND DECLARED
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Pogo declared a dividend of $0.03 (three cents) per share of common stock
to be paid February 23, 2001, to shareholders of record as of February 9, 2001.
PENDING ACQUISITION
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On November 20, 2000, Pogo announced the pending acquisition of NORIC
Corporation, parent to North Central Oil Corporation. Pending regulatory and
shareholder approval, the transaction is expected to close during the first
quarter of 2001.
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A summary of unaudited financial results follows, stated in thousands, except
per share amounts:
Three Months Ended Twelve Months Ended
December 31, December 31,
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2000 1999 2000 1999
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(Unaudited) (Unaudited)
Natural gas
Price per Mcf $ 4.36 $ 2.43 $ 3.16 $ 2.15
Production, Mcf per day 160,489 166,558 164,613 141,598
Crude Oil and Condensate
Price per barrel $ 27.93 $ 23.07 $ 28.92 $ 18.76
Production, barrels per day 31,989 19,825 25,788 16,036
Liquids production, barrels per day 34,087 21,858 27,929 18,113
Revenues:
Oil and gas $ 151,033 $ 82,410 $ 479,202 $ 230,499
Pipeline sales and other 5,248 2,739 15,113 7,159
Gains (losses) on sales 3,690 (45) 3,676 37,458
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Total $ 159,971 $ 85,104 $ 497,991 $ 275,116
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Income before change in
accounting principle $ 35,899 $ 8,090 $ 89,023 $ 22,134
Change in accounting principle - - (1,768) -
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Net income $ 35,899 $ 8,090 $ 87,255 $ 22,134
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Earnings (loss) per share:
Basic -
Income before change in
accounting principle $ 0.88 $ 0.20 $ 2.20 $ 0.55
Change in accounting principle - - (0.04) -
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Net income $ 0.88 $ 0.20 $ 2.16 $ 0.55
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Diluted -
Income before change in
accounting principle $ 0.76 $ 0.20 $ 1.99 $ 0.55
Change in accounting principle - - (0.04) -
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Net income $ 0.76 $ 0.20 $ 1.95 $ 0.55
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Discretionary Cash Flow* $ 108,145 $ 36,268 $ 316,114 $ 81,790
Weighted average number of common
stock and potential common stock
outstanding
Basic 40,589 40,249 40,445 40,178
Diluted 50,461 40,452 50,155 40,390
*Discretionary cash flow is net cash provided by operating activities before
changes in operating assets and liabilities and exploration expenses.
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* * *
Pogo Producing Company explores for, develops and produces oil and natural
gas. Headquartered in Houston, Pogo owns various ownership interests in 97
federal and state Gulf of Mexico lease blocks offshore from Louisiana and Texas.
Pogo also owns approximately 225,000 gross leasehold acres in various oil and
gas provinces onshore in the United States, approximately 735,000 gross acres in
the Gulf of Thailand, approximately 778,000 gross acres in Hungary,
approximately 115,000 gross acres in the United Kingdom North Sea, approximately
81,000 gross acres in the Denmark North Sea, and approximately 115,000 gross
acres in Canada. 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 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
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.
There will be a financial analyst teleconference call on Tuesday, January
23, 2001 at 2:30 pm CST. The call can be monitored through a live broadcast via
the World Wide Web at www.pogoproducing.com and www.streetfusion.com. A
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rebroadcast will be available on both of those websites through February 6,
2001. Real Network's Real Player or Microsoft Media Player is required to
access the webcast. They can be downloaded from www.real.com or
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www.microsoft.com/windows/mediaplayer.
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