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                                                                   EXHIBIT 10.32

              EXTENSION AGREEMENT TO CONTINUE EMPLOYMENT AGREEMENT
                    BETWEEN J. DON MCGREGOR ("EXECUTIVE") AND
           POGO PRODUCING COMPANY, A DELAWARE CORPORATION ("COMPANY"),
                        DATED EFFECTIVE FEBRUARY 1, 2000


     WHEREAS, Executive and Company are parties to an "Employment Agreement"
bearing an original "Effective Date" of February 1, 1999; and

     WHEREAS, February 1, 2000, (even date herewith) is hereby deemed to be the
"Renewal Date" in that Employment Agreement; and

     WHEREAS, Executive and Company each wish to extend said Employment
Agreement for an additional one-year period so as to terminate (unless further
extended) two years thereafter, (to-wit January 31, 2002); and

     WHEREAS, Company desires to retain the services of Executive for the
benefit of Company and its shareholders, and desires to induce Executive to
remain in its employ for that extended time period; and

     WHEREAS, Executive has agreed to continue to serve as an employee of
Company for the period specified herein from and after the date of this
Extension Agreement; and

     WHEREAS, Company and Executive desire to enter into this Extension
Agreement in order to formally secure for Company the benefit of the experience
and abilities of Executive, and to set forth the agreements and understandings
of Company and Executive; and

     WHEREAS, Company has advised Executive that execution and performance of
this Extension Agreement by Company has been duly authorized and approved by all
requisite corporate action on the part of the Company.



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     NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and agreements herein contained, and in consideration of the sum of $10 paid by
Company to Executive, receipt whereof is hereby acknowledged by Executive,
Executive and Company do hereby agree as follows:

     1. The Employment Agreement between Executive and Company bearing an
"Effective Date" of February 1, 1999 and a "Renewal Date" which is deemed herein
to be February 1, 2000, is hereby extended for an additional one-year period
commencing February 1, 2001 and ending January 31, 2002, unless such employment
period is hereafter further extended for an additional period by both Executive
and Company.

     2. All provisions of the Employment Agreement between Executive and Company
dated as of February 1, 1999, and as it is herein amended, are continued in full
force and effect without change as if the Employment Agreement had been
initially effective as of February 1, 2000.

                                       POGO PRODUCING COMPANY



                                       By: /s/ JOHN O. McCOY, JR.
                                           -------------------------------------
                                           Senior Vice President and
                                           Chief Administrative Officer


ATTEST:

/s/ JOE ANN KINGDON
-----------------------------------
Assistant Corporate Secretary

                                       EMPLOYEE:


                                       /s/ J. DON McGREGOR
                                       -------------------------------------
                                       J. Don McGregor