Pogo Producing focuses on foreign plays
While it is taking a conservative approach to finding new production, Houston-based Pogo Producing Co. is hunting for elephant-sized reserves in greener, watery 'pastures' overseas, though it intends to retain its holdings in North American plays.
While it is taking a conservative approach to finding new production, Houston-based Pogo Producing Co. is hunting for elephant-sized reserves in greener, watery "pastures" overseas, though it intends to retain its holdings in North American plays.
The company has been active in the Gulf of Mexico for more than 30 years and in the Permian basin of southeastern New Mexico the past decade. But Pogo is aiming for the bigger reserve targets situated in the deepwater Gulf and worldwide to get the best rate of return, said Paul G. Van Wagenen, Pogo's chairman, president, and CEO, at a recent energy conference.
Since entering its Gulf of Thailand concession in 1991, Pogo has produced or explored for oil and gas from multiple platforms in Block B8/32, the Block 9A farm-in area, and surrounding production areas.
Production began in 1997 from the 68,000-acre Tantawan production license area, where 37 wells were producing from five platforms at the end of 1999. Pogo also began producing oil and gas in July 1999 from the Benchamas production license area.
Over the next 15 months, Pogo will install four more platforms in the Gulf of Thailand. Development plans are underway for the 91,000-acre Maliwan production license area, and Pogo in February submitted an application for exploration and production of the North Jarmjuree license area.
In the North Sea, it's evaluating 3D seismic data for license areas in the UK and Danish sectors of the North Sea. It obtained in 1998 and 1999 Licenses 28/15 and 29/11�totaling 113,000 acres�in the UK sector and 81,000 acres in Denmark's License 13/98 area. It's also been shooting and analyzing seismic data from 778,000 acres in the Szolnok and Tompa blocks in southern Hungary.
Still, Pogo remains more conservative in terms of exploration and production spending when picking overseas prospects. Van Wagenen noted that Pogo could drill wells in the shallow Gulf of Thailand and shallow Pononian basin in Hungary at a lower cost.
The company also avoids countries saddled with political instability while seeking out areas that are more welcoming to foreign investment.
Hungary's low royalty and corporate tax rates provided a great incentive for Pogo to enter that country. Hungary's gas market has been fed by Russian gas supplies, but the country wants to find other sources, said Van Wagenen.
Pogo hasn't abandoned its E&P efforts in the Lower 48. In New Mexico, it achieved a 96% success rate on 25 wells and was ranked the eighth largest oil producer in the state this year, said Van Wagenen.
After drilling more than 400 wells in the region the last 10 years, Pogo has refocused its drilling efforts to find natural gas. It expects to ramp up its gas production to 37 MMcfd from 21 MMcfd and its oil production from 5,100 to 6,100 b/d.
Pogo also has enjoyed an 85% success rate drilling its southeast Louisiana's Thibodeaux field.