By OGJ editors
HOUSTON, Apr. 24 -- Mitsui & Co. and its subsidiaries plan to buy 50% interest in Pogo Producing Co.'s oil and gas leases in the Gulf of Mexico for $500 million.
Pogo and Mitsui also announced plans to jointly seek oil and gas acquisitions in the US and Canada.
Subject to customary conditions, closing is expected during June. Pogo expects to use proceeds from the Mitsui transaction to help finance its pending acquisition of Latigo Petroleum Inc. for $750 million (OGJ, Apr. 24, 2006, p. 38).
The Latigo acquisition involves Permian basin and Anadarko basin properties. Pogo said its strategy is to focus on US and Canadian onshore operations. The Houston company is keeping 50% interest in its Gulf of Mexico properties, which will then represent, after these two transactions, slightly more than 6% of Pogo's total proved reserves.
The pending sale of 50% in Pogo's Gulf of Mexico assets is equivalent to net production capacity, without any reduction due to continuing hurricane-related curtailments, of 8,000 b/d of oil and 24 MMcfd of gas.