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                                                                     EXHIBIT 4.7







                          1998 LONG-TERM INCENTIVE PLAN

                                       OF

                             POGO PRODUCING COMPANY

                 (AS AMENDED AND RESTATED THROUGH JULY 17, 2001)





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                               1998 INCENTIVE PLAN

                                       OF

                             POGO PRODUCING COMPANY

                 (AS AMENDED AND RESTATED THROUGH JULY 17, 2001)


                  1. Objectives. The Pogo Producing Company 1998 Incentive Plan
(as amended and restated through July 17, 2001) (the Plan") is designed to
retain key employees, to encourage the sense of proprietorship of such employees
and to stimulate the active interest of such persons in the development and
financial success of Pogo Producing Company, a Delaware corporation (the
"Company"), and its Subsidiaries (as hereinafter defined). These objectives are
to be accomplished by making awards under the Plan and thereby providing
Participants (as hereinafter defined) with a proprietary interest in the growth
and performance of the Company and its Subsidiaries.

                  2. Definitions. As used herein, the terms set forth below
shall have the following respective meanings:

                  "Award" means the grant of any form of nonqualified stock
option or stock appreciation right, stock award or cash award, whether granted
singly, in combination or in tandem, to a Participant who is an employee
pursuant to any applicable terms, conditions and limitations as the Committee
may establish in order to fulfill the objectives of the Plan.

                  "Award Agreement" means a written agreement between the
Company and a Participant that sets forth the terms, conditions and limitations
applicable to an Award.

                  "Board" means the Board of Directors of the Company.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

                  "Committee" means the Compensation Committee of the Board or
such other committee of the Board as is designated by the Board to administer
the Plan.

                  "Common Stock" means the Common Stock, par value $1.00 per
share, of the Company.

                  "Fair Market Value" means, as of a particular date, (i) if
shares of Common Stock are listed on a national securities exchange, the mean
between the highest and lowest sales price per share of Common Stock on the
consolidated transaction reporting system for the principal such national
securities exchange on that date, or, if there shall have been no such sale so
reported on that date, on the last preceding date on which such a sale was so
reported, (ii) if shares of Common Stock are not so listed but are quoted on the
NASDAQ National Market System, the mean between the highest and lowest sales
price per share of Common Stock on the

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NASDAQ National Market System on that date, or, if there shall have been no such
sale so reported on that date, on the last preceding date on which such a sale
was so reported or (iii) if the Common Stock is not so listed or quoted, the
mean between the closing bid and asked price on that date, or, if there are no
quotations available for such date, on the last preceding date on which such
quotations shall be available, as reported by NASDAQ, or, if not reported by
NASDAQ, by the National Quotation Bureau, Inc.

                  "Participant" means an employee of the Company or any of its
Subsidiaries to whom an Award has been made under this Plan.

                  "Subsidiary" means any corporation of which the Company
directly or indirectly owns shares representing more than 50% of the voting
power of all classes or series of capital stock of such corporation which have
the right to vote generally on matters submitted to a vote of the shareholders
of such corporation.

                  3. Eligibility. Key employees of the Company and its
Subsidiaries eligible for an Award under this Plan are those who hold positions
of responsibility and whose performance, in the judgment of the Committee, can
have a significant effect on the success of the Company and its Subsidiaries.

                  4. Common Stock Available for Awards. There shall be available
for Awards granted wholly or partly in Common Stock (including rights or options
which may be exercised for or settled in Common Stock) during the term of this
Plan an aggregate of 1,850,000 shares of Common Stock. The Board and the
appropriate officers of the Company shall from time to time take whatever
actions are necessary to file required documents with governmental authorities
and stock exchanges and transaction reporting systems to make shares of Common
Stock available for issuance pursuant to Awards. Common Stock related to Awards
that are forfeited or terminated, expire unexercised, are settled in cash in
lieu of Stock or in a manner such that all or some of the shares covered by an
Award are not issued to a Participant, or are exchanged for Awards that do not
involve Common Stock, shall immediately become available for Awards hereunder.
The Committee may from time to time adopt and observe such procedures concerning
the counting of shares against the Plan maximum as it may deem appropriate.

                  5. Administration. This Plan shall be administered by the
Committee, which shall have full and exclusive power to interpret this Plan and
to adopt such rules, regulations and guidelines for carrying out this Plan as it
may deem necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this Plan. The
Committee shall consist of at least two members of the Board. The Committee may,
in its discretion, provide for the extension of the exercisability of an Award,
accelerate the vesting or exercisability of an Award, eliminate or make less
restrictive any restrictions contained in an Award, waive any restriction or
other provision of this Plan or an Award or otherwise amend or modify an Award
in any manner that is either (i) not adverse to the Participant holding such
Award or (ii) consented to by such Participant. However, without the prior
approval of the Company's shareholders, the Committee shall not permit a new
stock option to be issued in exchange for the relinquishment or cancellation of
an existing stock option with a higher exercise price, nor shall it reprice any
existing stock options by lowering the stock option exercise price. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in


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this Plan or in any Award in the manner and to the extent the Committee deems
necessary or desirable to carry it into effect. Any decision of the Committee in
the interpretation and administration of this Plan shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned. No member of the Committee or officer of the Company to whom it has
delegated authority in accordance with the provisions of Paragraph 6 of this
Plan shall be liable for anything done or omitted to be done by him or her, by
any member of the Committee or by any officer of the Company in connection with
the performance of any duties under this Plan.

                  6. Delegation of Authority. The Committee may delegate to the
Chief Executive Officer and to other senior officers of the Company its duties
under this Plan pursuant to such conditions or limitations as the Committee may
establish.

                  7. Awards. The Committee shall determine the type or types of
Awards to be made to each Participant under this Plan. Each Award made hereunder
shall be embodied in an Award Agreement, which shall contain such terms,
conditions and limitations as shall be determined by the Committee in its sole
discretion and shall be signed by the Participant and by the Chief Executive
Officer or the Chief Administrative Officer of the Company for and on behalf of
the Company. Awards may consist of those listed in this Paragraph 7 and may be
granted singly, in combination or in tandem. Awards may also be made in
combination or in tandem with, in replacement of, or as alternatives to, grants
or rights under this Plan or any other employee plan of the Company or any of
its Subsidiaries, including the plan of any acquired entity. An Award may
provide for the granting or issuance of additional, replacement or alternative
Awards upon the occurrence of specified events, including the exercise of the
original Award granted to a Participant.

                  (a) Stock Option. An Award may consist of a right to purchase
         a specified number of shares of Common Stock at a specified price that
         is not less than the greater of (i) 50% of the Fair Market Value of the
         Common Stock on the date of grant and (ii) the par value of the Common
         Stock on the date of grant.

                  (b) Stock Appreciation Right. An Award may consist of a right
         to receive a payment, in cash or Common Stock, equal to the excess of
         the Fair Market Value or other specified valuation of a specified
         number of shares of Common Stock on the date the stock appreciation
         right ("SAR") is exercised over a specified strike price, as set forth
         in the applicable Award Agreement.

                  (c) Stock Award. An Award may consist of Common Stock or may
         be denominated in units of Common Stock. All or part of any stock award
         may be subject to conditions established by the Committee, and set
         forth in the Award Agreement, which may include, but are not limited
         to, continuous service with the Company and its Subsidiaries,
         achievement of specific business objectives, increases in specified
         indices, attaining specified growth rates and other comparable
         measurements of performance. Such Awards may be based on Fair Market
         Value or other specified valuations. The certificates evidencing shares
         of Common Stock issued in connection with a stock award shall contain
         appropriate legends and restrictions describing the terms and
         conditions of

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         the restrictions applicable thereto. As used herein, "Restricted Stock"
         means Common Stock that is restricted or subject to forfeiture
         provisions.

                  (d) Cash Award. An Award may be denominated in cash with the
         amount of the eventual payment subject to future service and such other
         restrictions and conditions as may be established by the Committee, and
         set forth in the Award Agreement, including, but not limited to,
         continuous service with the Company and its Subsidiaries, achievement
         of specific business objectives, increases in specified indices,
         attaining specified growth rates and other comparable measurements of
         performance.

                  8. Payment of Awards.

                  (a) General. Payment of Awards may be made in the form of cash
         or Common Stock or combinations thereof and may include such
         restrictions as the Committee shall determine, including, in the case
         of Common Stock, restrictions on transfer and forfeiture provisions.

                  (b) Deferral. With the approval of the Committee, payments in
         respect of Awards may be deferred, either in the form of installments
         or a future lump sum payment. The Committee may permit selected
         Participants to elect to defer payments of some or all types of Awards
         in accordance with procedures established by the Committee. Any
         deferred payment, whether elected by the Participant or specified by
         the Award Agreement or by the Committee, may be forfeited if and to the
         extent that the Award Agreement so provides.

                  (c) Dividends and Interest. Dividends or dividend equivalent
         rights may be extended to and made part of any Award denominated in
         Common Stock or units of Common Stock, subject to such terms,
         conditions and restrictions as the Committee may establish. The
         Committee may also establish rules and procedures for the crediting of
         interest on deferred cash payments and dividend equivalents for
         deferred payments denominated in Common Stock or units of Common Stock.

                  (d) Substitution of Awards. At the discretion of the
         Committee, a Participant may be offered an election to substitute an
         Award for another Award or Awards of the same or different type.

                  9. Stock Option Exercise. The price at which shares of Common
Stock may be purchased under a stock option shall be paid in full at the time of
exercise in cash or, if elected by the optionee, the optionee may purchase such
shares by means of tendering Common Stock or surrendering another Award,
including Restricted Stock, valued at Fair Market Value on the date of exercise,
or any combination thereof. The Committee shall determine acceptable methods for
tendering Common Stock or other Awards to exercise a stock option as it deems
appropriate. If permitted by the Committee, payment may be made by successive
exercises by the Participant. The Committee may provide for loans from the
Company to an employee to permit the exercise or purchase of Awards and may
provide for procedures to permit the exercise or purchase of Awards by use of
the proceeds to be received from the sale of Common Stock issuable pursuant to
an Award. Unless otherwise provided in the applicable Award Agreement, in the
event shares

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of Restricted Stock are tendered as consideration for the exercise of a stock
option, a number of the shares issued upon the exercise of the stock option,
equal to the number of shares of Restricted Stock used as consideration
therefor, shall be subject to the same restrictions as the Restricted Stock so
submitted as well as any additional restrictions that may be imposed by the
Committee.

                  10. Tax Withholding. The Company shall have the right to
deduct applicable taxes from any Award payment and withhold, at the time of
delivery or vesting of cash or shares of Common Stock under this Plan, an
appropriate amount of cash or number of shares of Common Stock or a combination
thereof for payment of taxes required by law or to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes. The Committee may also permit withholding to be
satisfied by the transfer to the Company of shares of Common Stock theretofore
owned by the holder of the Award with respect to which withholding is required.
If shares of Common Stock are used to satisfy tax withholding, such shares shall
be valued based on the Fair Market Value when the tax withholding is required to
be made.

                  11. Amendment, Modification, Suspension or Termination. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that no amendment or alteration that would impair the
rights of any Participant under any Award previously granted to such Participant
shall be made without such Participant's consent.

                  12. Termination of Employment. Upon the termination of
employment by a Participant, any unexercised, deferred or unpaid Awards shall be
treated as provided in the specific Award Agreement evidencing the Award. In the
event of such a termination, the Committee may, in its discretion, provide for
the extension of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any restrictions
contained in an Award, waive any restriction or other provision of this Plan or
an Award or otherwise amend or modify the Award in any manner that is either (i)
not adverse to such Participant or (ii) consented to by such Participant.

                  13. Assignability. Unless otherwise determined by the
Committee and provided in the Award Agreement, no Award or any other benefit
under this Plan shall be assignable or otherwise transferable except by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder. The Committee may prescribe and
include in applicable Award Agreements other restrictions on transfer. Any
attempted assignment of an Award or any other benefit under this Plan in
violation of this Paragraph 13 shall be null and void.

                  14. Adjustments.

                  (a) The existence of outstanding Awards shall not affect in
         any manner the right or power of the Company or its shareholders to
         make or authorize any or all adjustments, recapitalizations,
         reorganizations or other changes in the capital stock of the Company or
         its business or any merger or consolidation of the Company, or any
         issue of

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         bonds, debentures, preferred or prior preference stock (whether or not
         such issue is prior to, on a parity with or junior to the Common Stock)
         or Common Stock or the dissolution or liquidation of the Company, or
         any sale or transfer of all or any part of its assets or business, or
         any other corporate act or proceeding of any kind, whether or not of a
         character similar to that of the acts or proceedings enumerated above.

                  (b) In the event of any subdivision or consolidation of
         outstanding shares of Common Stock or declaration of a dividend payable
         in shares of Common Stock or capital reorganization or reclassification
         or other transaction involving an increase or reduction in the number
         of outstanding shares of Common Stock, then (i) the number of shares of
         Common Stock reserved under this Plan and covered by outstanding Awards
         denominated in Common Stock or units of Common Stock, (ii) the exercise
         or other price in respect of such Awards and (iii) the appropriate Fair
         Market Value and other price determinations for such Awards hereof
         shall each be proportionately adjusted by the Board to reflect such
         transaction. In the event of any consolidation or merger of the Company
         with another corporation or entity, or the adoption by the Company of a
         plan of exchange affecting the Common Stock or any distribution to
         holders of Common Stock of securities or property (other than normal
         cash dividends or dividends payable in Common Stock), the Board shall
         make appropriate adjustments to (i) the number of shares of Common
         Stock reserved under this Plan and covered by outstanding Awards
         denominated in Common Stock or units of Common Stock, (ii) the exercise
         or other price in respect of such Awards and (iii) the appropriate Fair
         Market Value and other price determinations for such Awards to give
         effect to such transaction; provided that such adjustments shall only
         be such as necessary to maintain the proportionate interest of the
         holders of the Awards and preserve, without exceeding, the value of
         such Awards. In the event of a corporate merger, consolidation,
         acquisition of property or stock, separation, reorganization or
         liquidation, the Board shall be authorized to issue or assume Awards by
         means of substitution of new Awards, as appropriate, for previously
         issued Awards or an assumption of previously issued Awards as part of
         such adjustment.

                  15. Restrictions. No Common Stock or other form of payment
shall be issued with respect to any Award unless the Company shall be satisfied
based on the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. Certificates evidencing shares of
Common Stock delivered under this Plan may be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any securities exchange or transaction reporting system upon which
the Common Stock is then listed and any applicable federal and state securities
laws. The Committee may cause a legend or legends to be placed upon any such
certificates to make appropriate reference to such restrictions.

                  16. Unfunded Plan. Insofar as it provides for Awards of cash,
Common Stock or rights thereto, this Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants who are
entitled to cash, Common Stock or rights thereto under this Plan, any such
accounts shall be used merely as a bookkeeping convenience. The Company shall
not be required to segregate any assets that may at any time be represented by
cash, Common Stock or rights thereto, nor shall this Plan be construed as
providing for such segregation, nor shall the Company nor the Board nor the
Committee be deemed to be a trustee


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of any cash, Common Stock or rights thereto to be granted under this Plan. Any
liability or obligation of the Company to any Participant with respect to a
grant of cash, Common Stock or rights thereto under this Plan shall be based
solely upon any contractual obligations that may be created by this Plan and any
Award Agreement, and no such liability or obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance on any property of the
Company. Neither the Company nor the Board nor the Committee shall be required
to give any security or bond for the performance of any obligation that may be
created by this Plan.

                  17. Governing Law. This Plan and all determinations made and
actions taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Delaware.

                  18. Effective Date of Plan. This Plan shall be effective as of
October 27, 1998, the date (the "Effective Date") it was approved by the Board.

                  19. Permitted Transfers. The Committee may, in its discretion,
authorize all or a portion of the Awards to be granted to a Participant to be on
terms which permit transfer by such Participant to (i) the spouse, parents,
siblings, children or grandchildren of the Participant ("Immediate Family
Members"), (ii) a trust or trusts for the exclusive benefit of such Immediate
Family Members, or (iii) a partnership in which such Immediate Family Members
are the only partners, provided that (x) there may be no consideration for any
such transfer, (y), if applicable, the Award Agreement pursuant to which such
Award is granted must be approved by the Committee, and must expressly provide
for transferability in a manner consistent with this Paragraph 19, and (z)
subsequent transfers of transferred Awards shall be prohibited except those in
accordance with Paragraph 13. Following transfer, any such Awards shall continue
to be subject to the same terms and conditions as were applicable immediately
prior to transfer, provided that (i) in the event of termination of employment,
Paragraph 12 hereof shall continue to be applied with respect to the original
Participant, following which the Awards shall be exercisable by the transferee
only to the extent, and for the periods specified in the Paragraph 12 and the
applicable Award Agreement, (ii) the original Participant shall remain subject
to the withholding tax provisions of Paragraph 10, and (iii) the Company shall
have no duty or obligation to provide notice to a transferee of any action or
event affecting the rights of the transferee under the Plan including, without
limitation, any amendment, modification, suspension or termination of the Plan
pursuant to Paragraph 11, the early termination of an Award pursuant to
Paragraph 12, or adjustments to the amount of the Awards pursuant to Paragraph
14.