**Exhibit99.3**

**MILLER AND LENTS, LTD.**

 

**INTERNATIONAL OIL AND GAS CONSULTANTS**

 

**TWENTY-SEVENTH FLOOR**

 

**1100 LOUISIANA**

 

**HOUSTON, TEXAS 77002-5216**

 

**TELEPHONE 713-651-9455**

 

**TELEFAX 713-654-9914**

 

**e-mail: mail@millerandlents.com**

 

January 16, 2007

POGO ProducingCompany5 Greenway Plaza, Suite 2700Houston, Texas  77046-0504
|        |   | Re: Reserves and Future Net Revenues |
|--------|--------|--------------------------------------|
|   |   | As of December 31, 2006              |
|   |   | SEC Price Case                       |

 

Gentlemen:

At your request, we reviewed the estimates of provedreserves of oil, natural gas liquids, and gas and the future net revenuesassociated with these reserves that POGO Producing Company (POGO) attributes toits net interests in oil and gas properties located in Louisiana, Texas, andWyoming as of December 31, 2006.  POGO’sestimates, shown below, are in accordance with the definitions contained inSecurities and Exchange Commission Regulation S-X, Rule 4-10(a) as shown in theAppendix.

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|                                                        | **Reserves and Future Net Revenues as of December  31, 2006** | ** **    |       | ** **       | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|---------------|------------|------------------|------------|
| ** **                                                                                                                                                                                                                                                                                                                           | ** **                                                    | ** **    | ** ** | ** **       | ** ** | ** ** | ** ** |
| ** **                                                                                                                                                                                                                                                                                                                           | ** **                                                    | ** **    | ** ** | ** **       | ** ** | ** ** | ** ** |
| ** **                                                                                                                                                                                                                                                                                                                           | ** **                                                    | **Proved**    | ** ** |
| ** **                                                                                                                                                                                                                                                                                                                           | ** **                                                    | **Developed** | ** ** | ** **       | ** ** | **Total** | ** ** |
| ** **                                                                                                                                                                                                                                                                                                                           | ** **                                                    | **Producing** | ** ** | **Nonproducing** | ** ** | **Undeveloped** | ** ** | **Proved** | ** ** |
| **Net Remaining Reserves**                                                                                                                                                                                                                                                                                                           |                                                          |          |       |             |       |   |   |   |   |
| Oil/Condensate,  MBbls.                                                                                                                                                                                                                                                                                                              |                                                          | 4,089.8       |       | 504.4            |       | 2,016.9 |   | 6,611.1 |   |
| Plant Products,  MBbls.                                                                                                                                                                                                                                                                                                              |                                                          | 160.1         |       | 27.5             |       | 0.0 |   | 187.6 |   |
| Gas, MMcf                                                                                                                                                                                                                                                                                                                            |                                                          | 386,415.0     |       | 23,114.0         |       | 57,526.0 |   | 467,055.0 |   |
|                                                                                                                                                                                                                                                                                                                                 |                                                          |          |       |             |       |   |   |   |   |
| **Future Net Revenues**                                                                                                                                                                                                                                                                                                              |                                                          |          |       |             |       |   |   |   |   |
| Undiscounted, M$                                                                                                                                                                                                                                                                                                                     |                                                          | 1,431,658.4   |       | 102,357.5        |       | 174,700.7 |   | 1,708,716.6 |   |
| Discounted @ 10%, M$                                                                                                                                                                                                                                                                                                                 |                                                          | 741,705.2     |       | 51,580.3         |       | 86,108.6 |   | 879,394.1 |   |
|                                                                                                                                                                                                                                                                                                                                      |                                                               |               |            |                  |            |  |  |  |  |  |  |

 

We performed independentestimates of 91 percent of the proved reserves estimated by POGO.  We ranked and selected, for independentestimates and review, those properties with the largest reserve 

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presentvalue.  Based on our investigations andsubject to the limitations described hereinafter, it is our judgment that (1)POGO has an effective system for gathering data and documenting informationrequired to estimate its proved reserves and to project its future netrevenues, (2) in making its estimates and projections, POGO used appropriateengineering, geologic, and evaluation principles and techniques that are inaccordance with practices generally accepted in the petroleum industry, and (3)the results of those estimates and projections are, in the aggregate,reasonable.

All reserves discussed herein are located within thecontinental United States.  Gas volumeswere estimated at the appropriate pressure base and temperature base that areestablished for each well or field by the applicable sales contract orregulatory body.  Total gas reserves wereobtained by summing the reserves for all the individual properties and aretherefore stated herein at a mixed pressure base.

POGO represents that the future net revenues reportedherein were computed based on prices being received for oil, natural gasliquids, and gas as of December 31, 2006 and are in accordance with Securitiesand Exchange Commission Regulation S-X, Rule 4-10(a).  The present value of future net revenues wascomputed by discounting the future net revenues at 10 percent per annum.  Estimates of future net revenues and thepresent value of future net revenues are not intended and should not beinterpreted to represent fair market values for the estimated reserves.

Reserve estimates were based on decline curve extrapolations,material balance calculations, volumetric calculations, analogies, orcombinations of these methods for each well, reservoir, or field.  Reserve estimates from volumetriccalculations and from analogies are often less certain than reserve estimatesbased on well performance obtained over a period during which a substantialportion of the reserves were produced.

In making its projections, POGO estimated wellabandonment costs for certain fields, except where salvage values were assumedto offset these expenses.  Future costs,if any, for restoration of producing properties to satisfy environmentalstandards were not deducted from future revenues as such estimates are beyondthe scope of this assignment.  POGO’sestimates include adjustments for gas balancing.

The evaluations presented in this report, with theexceptions of those parameters specified by others, reflect our informedjudgments based on accepted standards of professional investigation but aresubject to those generally recognized uncertainties associated withinterpretation of geological, geophysical, and engineering information.  Government policies and market conditionsdifferent from those employed in this study may cause the total quantity of oil,natural gas liquids, or gas to be recovered, actual production rates, pricesreceived, or operating and capital costs to vary from those presented in thisreport.

In conducting these evaluations, we relied uponproduction histories, accounting and cost data, and other financial, operating,engineering, and geological data supplied by POGO.  To a lesser extent, nonproprietary dataexisting in the files of Miller and Lents, Ltd., and data obtained fromcommercial services were used.  We alsorelied, without independent verification, upon POGO’s representation of 

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its ownership interests, payout balances andreversionary interests, the current prices, and the transportation feesapplicable to each property.

Miller and Lents, Ltd. is an independent oil and gasconsulting firm.  None of the principalsof this firm have any financial interests in POGO or in any of its affiliatedcompanies.  Our fee is not contingentupon the results of our work or report, and we have not performed otherservices for POGO that would affect our objectivity.
|        | Very truly yours,      |
|--------|------------------------|
|   |                   |   |
|   | MILLER AND LENTS, LTD. |
|   |                   |   |
|   |                   |   |
|   |                   |   |
|   | By                     | /s/ Carl D. Richard |
|   |                   | Carl D. Richard |
|   |                   | Senior Vice President |
|   |                   |   |
|   |                   |   |
|   | By                     | /s/ R. W. Frazier |
|   |                   | R. W. Frazier |
|   |                   | Senior Vice President |

 

 

CDR/lg

 

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