Pogo to Buy Latigo Petroleum for $750M

Pogo Producing Co. has entered into definitive agreement to acquire privately-held Latigo Petroleum, Inc. for $750m in cash, Trading Markets reported. The Houston, Texas-based company said the acquisition of Latigo and its assets in the Permian Basin and Texas Panhandle will increase Pogo's total proven oil and gas reserves by 13%, from 2,042 billion cubic feet of natural gas equivalent, or bcfe, to 2,317 bcfe. The company said it would finance the acquisition of Latigo, which was formed by private-equity firms Warburg Pincus LLC and JPMorgan Partners, with cash on hand, capacity under its existing revolving credit facility and opportunistic capital market transactions. The acquisition, which is subject to customary regulatory approvals, is expected to close during May of 2008. Pogo said the acquisition would extend its indicated reserves life to approximately 10 years and add over 400 development and exploration drilling locations to its inventory. Due to a large undeveloped acreage position, Pogo said it expects to pursue numerous high-potential, 3-D seismic driven exploratory prospects. Under the agreement, Pogo will acquire 275 bcfe of estimated proven reserves on approximately 404,700 net acres. Latigo's reserves are 49% natural gas and 51% oil. (Source: Trading Markets)