Exhibit
10.2


 


[EXECUTION
COPY]


 


SECOND AMENDMENT TO CREDIT AGREEMENT


 


THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of
May 17, 2006 (the “Amendment”), among POGO PRODUCING COMPANY,
a Delaware corporation (the “Borrower”),
the various financial institutions which are or may become parties to the
Credit Agreement, as amended hereby (collectively, the “Lenders”), BANK OF MONTREAL, acting through
its Chicago, Illinois branch, as administrative agent (the “Administrative Agent”) for the Lenders, BANK OF AMERICA, N.A., TORONTO DOMINION (TEXAS) LLC and BNP
PARIBAS, as Co-Syndication Agents (“Co-Syndication Agents”)
for the Lenders, WACHOVIA BANK, NATIONAL
ASSOCIATION, as
Documentation Agent (“Documentation Agent”) for the Lenders, and CITIBANK, N.A. and THE BANK OF NOVA SCOTIA, as managing agents (“Managing
Agents”) for the Lenders.


 


W I T N E S S E T H


 


WHEREAS the Borrower, the Lenders and the Agents are
parties to a certain Credit Agreement, dated as of December 16, 2004, as
amended to date (the “Credit Agreement”);
and


 


WHEREAS, the Borrower has requested that Credit
Agreement be amended (i) to increase the Borrowing Base and provide for certain
future, automatic adjustments to the Borrowing Base in certain situations and
(ii) to make other changes, as set forth herein; and


 


WHEREAS, subject to the terms and conditions of this
Amendment, the Lenders and the Agents are willing to enter into this Amendment;


 


NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein contained, the parties hereto hereby agree as
follows:


 


1.             DEFINITIONS.  Unless otherwise defined herein or the context
otherwise requires, or except as the definition may be amended by this
Amendment, terms used in this Amendment, including its preamble and recitals,
shall have the meanings provided in the Credit Agreement, as hereby amended.


 


2.             AMENDMENTS TO CREDIT AGREEMENT.


 


2.1           The definition of “Additional Senior
Unsecured Indebtedness” contained in Section 1.1 of the Credit Agreement hereby
is amended by replacing the reference to “$50,000,000” with “$100,000,000”.


 


2.2           The definition of “Borrowing Base
Reduction Amount” contained in Section 1.1 of the Credit Agreement hereby is
amended in its entirety to read as follows:


 


“              “Borrowing Base
Reduction Amount” means, at any time, 100% of the principal amount of all
Senior Debt of the Borrower issued or incurred since the last redetermination
of the Borrowing Base so long as such Senior Debt remains outstanding plus
30% of the principal amount of all Additional Subordinated Indebtedness issued
or incurred since the last redetermination of the Borrowing Base so long as
such Additional Subordinated Indebtedness remains outstanding.”


 

















 


2.3           The definition of “Senior Debt”
contained in Section 1.1 of the Credit Agreement hereby is amended in its
entirety to read as follows:


 


“              “Senior Debt”
 means, at the time of any determination
thereof, without duplication with respect to any of the Borrower and its
Restricted Subsidiaries, the principal amount of all Indebtedness of that Person
constituting borrowed money (including, without limitation, any Senior Notes
Indebtedness) other than (i) Subordinated Indebtedness, (ii) Non-Recourse
Indebtedness, (iii) any Guarantee by that Person of any such Indebtedness of
the Borrower or any of its Subsidiaries, (iv) any Guarantee by that Person of
the portion of any such Indebtedness of any of its Affiliates that is included
at that time on the consolidated balance sheet of the Borrower and its
consolidated Subsidiaries and Affiliates, (v) Loans outstanding and LC Exposure
under this Agreement and (vi) Additional Senior Unsecured Indebtedness.”


 


2.4           The proviso to Section 8.1 of the
Credit Agreement hereby is amended in its entirety to read as follows:


 


“provided  further that Indebtedness
(other than Guarantees) of Restricted Subsidiaries shall not exceed $75,000,000
in the aggregate at any time.”


 


3.             BORROWING
BASE.


 


3.1           Unless
subject to further adjustment pursuant to the other provisions of this Section 3,
by execution of this Amendment, each of the Administrative Agent, the Required
Borrowing Base Lenders and the Borrower agree that, during the period from the
date hereof to the date of the next determination of the Borrowing Base
pursuant to the provisions of Section 2.8 of the Credit Agreement,
the Borrowing Base shall equal $1,700,000,000. Notwithstanding the foregoing,
the Applicable Borrowing Base remains subject to adjustment due to changes in
the Borrowing Base Reduction Amount as set forth in the Credit Agreement.


 


3.2           In the
event of the consummation of the Gulf of Mexico Divestiture (as herein
defined), by execution of this Amendment, each of the Administrative Agent, the
Required Borrowing Base Lenders and the Borrower agree that, during the period
from the date hereof to the date of the next determination of the Borrowing
Base pursuant to the provisions of Section 2.8 of the Credit Agreement, the Borrowing
Base shall equal the then current Borrowing Base (initially $1,700,000,000
pursuant to Section 3.1) less $200,000,000. Notwithstanding the
foregoing, the Applicable Borrowing Base remains subject to adjustment due to
changes in the Borrowing Base Reduction Amount as set forth in the Credit
Agreement.


 


3.3           For
purposes of this Amendment, the “Gulf of Mexico Divestiture” means the
divestiture by the Borrower of a 50% interest in the Borrower’s assets located
in the Gulf of Mexico, pursuant to that certain Purchase and Sale Agreement,
dated as of April 20, 2006, among the Borrower, as seller, and MitEnergy
Upstream LLC, as buyer, as may be amended from time to time in accordance with
the terms thereof.


 


3.4           Each
of the Administrative Agent, the Required Borrowing Base Lenders and the
Borrower agree and acknowledge that the various determinations, and
redeterminations, of the Borrowing Base set forth in this Section 3
shall not be considered to be a Non-Standard 


 


2

















 


Determination of the Borrowing Base by the Borrower, the Administrative
Agent or the Required Borrowing Base Lenders for the purposes of the first
sentence of Section 2.8(b) of the Credit Agreement.


 


3.5           Each
of the Administrative Agent, the Required Borrowing Base Lenders and the
Borrower waive any right to a redetermination of the Borrowing Base pursuant to
Section 2.8(c)(i) of the Credit Agreement in connection with the
consummation of the Gulf of Mexico Divestiture.


 


4.             EFFECTIVENESS.  This Amendment shall become effective as of
the date hereof when the Administrative Agent shall have received counterparts
hereof duly executed by the Borrower, the Administrative Agent and each of the
Required Borrowing Base Lenders or Required Lenders (or, in the case of any
party as to which an executed counterpart shall not have been received,
telegraphic, telex, or other written confirmation from such party of execution
of a counterpart hereof by such party), as applicable.


 


5.             REPRESENTATIONS AND WARRANTIES.


 


In order to induce the Lenders and the Agents to enter
into this Amendment, the Borrower hereby reaffirms, as of the date hereof, its
representations and warranties contained in Article VI
of the Credit Agreement (except to the extent any such representation and
warranty relates solely to an earlier date) and additionally represents and
warrants as follows:


 


5.1           Organization,
etc.  The Borrower has full
corporate power and authority and holds all requisite Governmental Approvals to
enter into and perform its obligations in respect of the Financing
Transactions, as amended hereby, and this Amendment, except where the failure
to have such Governmental Approvals could not reasonably be expected to have a
Material Adverse Effect.


 


5.2           Due
Authorization, Non-Contravention, etc.  The execution, delivery and performance by the
Borrower of this Amendment and the consummation of the transactions contemplated
hereby and by the Credit Agreement as amended by this Amendment, are within the
Borrower’s corporate powers, have been duly authorized by all necessary
corporate action, and do not


 


(a)           contravene the Borrower’s Organic
Documents;


 


(b)           contravene any contractual
restriction, law or governmental regulation or court decree or order binding on
or affecting the Borrower; or


 


(c)           result in, or require the creation or
imposition of, any Lien on any properties of the Borrower.


 


5.3           Governmental
Approval, Regulation etc.  No
Governmental Approval or other action by any Governmental Authority is required
for the due execution, delivery or performance by the Borrower of this
Amendment or any other Loan Document to be executed by it, except for the
filing of this Agreement with the SEC as a material document under Rule
601(b)(iv) of 

Regulation S-K.


 


3

















 


5.4           Validity,
etc.  This
Amendment and the Credit Agreement as amended hereby, constitute the legal,
valid and binding obligations of the Borrower enforceable against the Borrower
in accordance with their respective terms except as such enforceability is
subject to the effect of (i) any applicable bankruptcy, insolvency,
reorganization or similar law relating to or affecting creditors’ rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), including
concepts of materiality, reasonableness, good faith and fair dealing.


 


6.             EFFECT OF AMENDMENT.


 


This Amendment shall be deemed to be an amendment to
the Credit Agreement, and the Credit Agreement, as amended hereby, is hereby
ratified, approved and confirmed in each and every respect. All references to
the Credit Agreement in any other document, instrument, agreement or writing
shall hereafter be deemed to refer to the Credit Agreement as amended hereby.


 


7.             GOVERNING LAW, SEVERABILITY, ETC.


 


THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER, GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
NEW YORK. Whenever possible each provision of this
Amendment shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Amendment shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Amendment.


 


THIS WRITTEN AMENDMENT AND THE CREDIT AGREEMENT AS
AMENDED BY THIS AMENDMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
MAY NOT BE CONTRADICTED BY PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


8.             MISCELLANEOUS.


 


8.1           Successors
and Assigns.  This Amendment
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.


 


8.2           Counterparts.
 This Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.


 


8.3           NO ORAL AGREEMENTS.  THIS AMENDMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.


 


THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


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[SIGNATURES
BEGIN ON FOLLOWING PAGE]


 


5

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed by their respective officers thereunto duly
authorized as of the day and year first written above.


 


	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  James P. Ulm, II

  
	
   

  	
  Title:

  	
  Senior Vice President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
				



 


 


[Signature Page – Pogo Producing 

Company –  Second Amendment

to Credit Agreement]


 


S-1

















 


	
   

  	
  BANK OF MONTREAL,
  acting through its U.S. branches and agencies, including initially its
  Chicago, Illinois branch, as Administrative Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-2

















 


	
   

  	
  BANK
  OF AMERICA, N.A., as a Co-Syndication 

  Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-3

















 


	
   

  	
  TORONTO DOMINION (TEXAS) LLC,
  as a 

  Co-Syndication Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-4

















 


	
   

  	
  BNP
  PARIBAS, as a Co-Syndication Agent and as 

  a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-5

















 


	
   

  	
  WACHOVIA
  BANK, NATIONAL 

  ASSOCIATION, as Documentation Agent and as a 

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-6

















 


	
   

  	
  CITIBANK, N.A., as a Managing
  Agent and as a 

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-7

















 


	
   

  	
  THE BANK OF NOVA SCOTIA, as a Managing
  

  Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


	
   

  	
  SCOTIABANC INC., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-8

















 


	
   

  	
  THE BANK OF NEW YORK, as a
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-9
















 


	
   

  	
  FORTIS CAPITAL CORP., as a
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-10

















 


	
   

  	
  THE BANK OF TOKYO - MITSUBISHI UFJ, 

  LTD., formerly known as UFJ Bank, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-11

















 


	
   

  	
  UNION BANK OF CALIFORNIA, N.A.,
  as a 

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-12

















 


	
   

  	
  THE ROYAL BANK OF SCOTLAND plc, as
  a 

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-13

















 


	
   

  	
  SOCIETE GENERALE, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-14

















 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,
  as a 

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


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  COMERICA BANK, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-16

















 


	
   

  	
  SUNTRUST BANK, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-17

















 


	
   

  	
  COMPASS BANK, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-18

















 


	
   

  	
  NATEXIS BANQUES POPULAIRES, as
  a 

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-19

















 


	
   

  	
  MIZUHO CORPORATE BANK, LTD.,
  as a 

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-20

















 


	
   

  	
  WELLS FARGO BANK, N.A., as a
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-21

















 


	
   

  	
  AMEGY BANK NATIONAL ASSOCIATION,
  

  successor to Southwest Bank of Texas, N.A., as a 

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


S-22